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Original article: Economistas no le compran el plan a Quiroz: vender 1.200 propiedades del Estado no resolvería la brecha fiscal

The proposal from Finance Minister Jorge Quiroz to liquidate 1,200 public properties to raise between $200 million and $300 million and strengthen the Economic and Social Stabilization Fund (FEES) has faced a strong rejection from economists across various academic sectors.

Experts consulted by CIPER agree that while the measure might provide immediate liquidity, it does not address the underlying issue of the structural deficit in Chile, which closed 2025 at 3.6% of GDP, amounting to about $12 billion.

President José Antonio Kast’s government initiative involves selling both unused assets held by ministries and properties managed by the state due to “vacant inheritance” — properties whose owners died without legal heirs.

Selling Assets Not the Best Path to Achieve Fiscal Space

The proceeds from this process would go to the FEES, designed to cushion public finances against sudden economic shifts. However, the four economists consulted by the investigative outlet warned that selling assets is not the best strategy to regain fiscal space and instead suggested adhering to a structural surplus policy or generating new permanent sources of income.

Jorge Rodríguez, a researcher at the Public Studies Center, noted that the International Monetary Fund (IMF) recommends that the FEES should represent between 5% and 7% of GDP, while it currently stands at just 1%.

“The core solution involves achieving structural surpluses, something Chile has only accomplished twice in the last 15 years,” he stated.

In the same vein, Gustavo González, Ph.D. in Economics from the University of Chicago and academic at the Catholic University, argued that the best course of action would be to return to the structural balance rule proposed during Ricardo Lagos’ administration, allowing for the accumulation of assets during prosperous times and their use in recessions.

According to Andrea Repetto, a doctor at the Massachusetts Institute of Technology (MIT) and former president of the Independent Fiscal Council (CFA), the current imbalance results from the fact that “fiscal spending has exceeded long-term structural revenue” for years. Therefore, required funding must be permanent: new tax sources, enhanced tax compliance, or spending cuts that reallocate resources.

Marco Kremerman of the Sol Foundation added that Chile should emulate Norway’s model regarding oil and create a counter-cyclical mechanism that harnesses the high price of copper.

The statistics underscore the urgency. Although public debt remains at 41.7% of GDP—below the prudential 45% recommended by the CFA—this level is significantly above the 3.9% recorded in 2007. The 2008 recession and the 2020 pandemic elevated debt to levels not seen since 1990, Kremerman recalled.

Moreover, the CFA warned Congress that the major tax reform being pushed by José Kast’s administration will have a deficit impact at least until 2031 due to tax cuts and exemptions to VAT.

Transparent, Competitive, and Public Auction for Asset Sales

The economists agreed that if the properties are ultimately sold, the process must be transparent, competitive, and held via public auction to secure the best price and avoid favoritism.

“Without renouncing the goal of achieving surpluses, the government can start by selling illiquid state assets,” Rodríguez clarified in statements to CIPER.

However, González cautioned that the operation will not substantially change the total value of state assets, though it could provide quick cash in emergencies.

Quiroz defended the measure before Congress on April 8, emphasizing that the FEES dropped from $8.148 billion in March 2022 to $3.914 billion at the end of 2025. Yet, experts argue that selling public assets, as proposed by the Secretary of State, is not equivalent to rectifying fiscal accounts.

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