Government’s economic policy
The minister of finance stated that economic growth and the creation of asocial protection system are the country’s main challenges today. He anticipated a positive economic scenario in the mid-term, but called for prudence, since the expansion and high copper prices should not remain for long.
The minister of finance Andres Velasco, stated that the government will decisively undertake the country’s challenges, namely, maintain the economic growth and widen people’s social protection network by way of a system that takes care of them from childhood to old age.
The minister referred to the topic when presenting the main objectives of the government’s economic policies, this morning, within the scope of a seminar organized by Fundación PROhumana. “It has become tradition that the minister of finance presents his/her economic projects to business organizations. However, I represent a varied and balanced administration, one that wishes to interact with the citizens. This is why I am here today, before such a varied and balanced audience as you are. I am also here because I believe that growth with social responsibility, respecting the environment, is possible, because development must be a tool through which people’s lives may improve”, he stated.
As for the economic program, Velasco indicated that the country is on the track to growth, and that a “clear setting” may be envisioned for the next two years, although, he sustained, future must be taken wisely, since the economy has been expanding for years and I do not dare assure that it will do so for ever”. Likewise, he said that, nowadays, copper price has broken all records ever, exceeding U$ 2.5 per pound, “we must be prudent, because the future price of metals should start to fall gradually”.
The minister said that the sound economic policies designed over the past years, together with increasing levels of investment, amounting to 29% of the GDP last year, make it possible to anticipate that Chile will continue to grow and generate employment. "Over the past years, we have grown around 6%, and I believe that Chile should go on growing at similar rates in the coming years”, he asserted.
He reaffirmed the government’s commitment to maintain a structural fiscal surplus of 1% of the GDP “as long as the circumstances that led to set said rate do not change”, he stated. He remarked that a sound fiscal policy “no only keeps us from the adverse effects of external cycles, but also adds to the economy’s competitiveness”.
He also gave details of the initiatives that will be adopted to promote entrepreneurship, with a special emphasis on the development of small and mid-size companies, as well as on strengthening innovation, by putting into practice the recommendations of the National Innovation Board that can be financed with resources from the mining royalty. He emphasized that the measures that are to be taken to strengthen the governance that will assure free competition, by way of a greater allocation of resources to the Office of the National Economic Attorney and Court of Free Competition, a new merger policy, and fines meant to have a dissuading effect.
Velasco added that there is a great challenge as to providing people with more security, so that they may dare start new enterprises and innovate having the support of a social protection network assuring them more opportunities and keeping them from different contingencies.
Said system, he added, must start at childhood by eradicating birth inequities. “What we currently have is a system which coverage is poor, access to it is unequal, and which does to facilitate women’s incorporation to labor. On said regard, we have already implemented a measure consisting in increasing nursery education coverage for 20 thousand children opening 800 daycare centers. Furthermore, we are addressing the issue at legislative level, creating an Advisory Committee that is to design a new childhood protection policy”, he added.
The minister affirmed that similar measures were taken as for the protection of the elderly, through measures with immediate application, such as the bill that is being discussed at Congress to increase pensions, and others of a more structural nature, such as the pension system reform based on the assessment based on the conclusions on the issue as drawn up by the President’s Advisory Committee. On this regard, the minister said that the present pension system shows problems related to coverage, competition and gender inequities that must be amended.
Last updated: May 2, 2006