In Chile more than 30% of the world's copper is produced, however, we have a public expenditure of 21%, the lowest of the OECD. The artificial profitability generated in the copper sector generates a very large inefficiency, investments in clean industries are scarce. 70% of the exploitation today is private, who control the price of copper in the world. My country is potentially very rich, copper is indispensable, but we are very poor, with the greatest inequality in the world.
Your question has two issues. The first concerns the distribution of income within a country between wages, profits and tax revenues. The second concerns the distribution of value between countries due to the international division of labour. My answer relates to the latter issue.
An international specialization based on the export of raw materials, such as copper, does not favour the economic development. The gains from free trade are not equally distributed between countries because of the ‘unequal exchange’ involved in capitalist market relations.
(See my paper https://www.researchgate.net/publication/311533485_Unequal_Exchange_in_International_Trade_A_General_Model)
The raw materials are subject to considerable price variability often arising from financial speculation. In times of global economic crisis, the prices of industrial raw materials suffer a strong downward pressure, and this leads to an increase in foreign debt for producer countries. In times of world economic expansion, the increased rent derived from the possession of raw materials should be directed towards productive investments to diversify the industrial structure of the producer country. However, contrary to the prevailing neo-liberal claims, this requires an effective public economic policy in economic development planning.
Working Paper Unequal Exchange in International Trade: A General Model
It would better say that Chile is trapped with the curse of resource rich countries. Curse of oil is the typical case, but curse of natural resources is common for countries which are abundant in one specific kind of natural resources.
Do you know that Japan was once one of the largest copper producers of the world? Japan now produces practically no copper. The same history precedes for silver. Japan was one of major silver producers of the old world and a major provider of silver bullion to China until the early Edo period (1603-1867). Natural resources are exhaustible. Monopolistic industrial structure of the copper mining industry and financial speculation are not the most important problems (I admit that they are but not the most important ones).
The trouble with Chile, I suppose, is the lack of new products and industries that can compete in the international market. The focus of your attention should be replaced from copper mining to other economic activities. Chile must be the case where the middle income trap typically applies. I like to suggest Marco Vivarelli's survey paper:
The middle income trap: a way out based on technological and structural change
If you visit my question page
https://www.researchgate.net/post/Should_LDCs_invest_more_resources_in_R_D
you can find the URL of is paper (post #31). In economic study it is important to secure a wide coverage of interests. Cautions should be paid because there are so many simplistic models that produce pseudo-solutions.
There is no link between resource richness and country's prosperity. It depends on who owns those resources. If they are owned by public and the social system has some element of justice, resource richness will transform into prosperity. This was the case of the former USSR. Wild privatization in 1990s has stripped the population out of resources and the level of poverty grew a lot. Only after 2000 new Russian president Putin fought with oligarchs and introduced substantial taxes in oil and other resource extracting industries; see http://www.ey.com/Publication/vwLUAssets/ey-taxation-in-the-russian-oil-sector-learning-from-global-fiscal-perspectives/$FILE/ey-taxation-in-the-russian-oil-sector-learning-from-global-fiscal-perspectives.pdf . This has driven state budget up. However, the efficiency of its use is below one in the former USSR due to corruption. The recent fall in oil prices has driven the poverty.
In general, all population cannot be rich just because of resource rent. Saudi Arabia and some other oil extracting countries can do that because their population is relatively small (comparing to resource base). In general, income from resources has to be complemented with income from other economic activity, including industry, agriculture and services.
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