Less than a year ago the foreign press was filled with glowing reports on the heroic Chilean miners and the heroic efforts by the heroic minister of mining and his determined taskmaster, Sebastian Piñera, to rescue them. After the rescue, the magic combination of determination, top-notch engineering, political will, and luck was dubbed by the government 'the Chilean Way'.
The contrast with this report which appeared a few days ago in the New York Times could not be greater. The foreign press has caught on to the La Polar case, and, more importantly, to the general unscrupulous practice retailers use to sell credit, through which they make much more money than by selling doodads and trinkets imported from China.
Several things are worrying about the report:
1. That the rest of the world is noticing that the Far West kind of capitalism that was sold to Chileans and other Latin Americans has exhausted the stage which brings benefits. The true costs are starting to show.
2. While the US and Europe went to through a similar period, they also had civil and political societies prepared to correct the mistakes through regulation. There is little hope that can be done (at least in Chile).
3. That foreign investors could begin to make the connection between the kind of business practices being employed towards consumers and those which they may encounter in the broader business community.
Without wishing to employ Latin American stereotypes, it's a jungle out there. Beware of Kaa.
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