Friday, March 31, 2017

NO+ PAYGO: why is the pay-as-you-go system unviable today


The low birth rate and the increase in life expectancy explain why the pay-as-you-go system would not improve pensions.

In 1980, Chile made the right decision to replace the pension system based on a pay-as-you-go (PAYGO) mechanism, with a fully funded individual capitalization system run by private sector pension funds. In a pay-as-you-go system, the active population pays contributions with which pensioners' pensions are paid, and in an individual capitalization, the employee's contributions made to their individual savings account is what builds the fund that will be used to finance their pension.

The decision to replace the pay-as-you-go system with an individual capitalization system responded to the unfeasibility of sustaining it in a context of declining fertility rates, and an increasingly healthy population with increasing life expectancies, what would invariably condemn the pay-as-you-go system the collapse.

The functioning of the pay-as-you-go system is strongly influenced by demographic changes. In Chile, there is a strong drop in the fertility rate. In 1960, a woman had an average of 5.6 children, in 2012, only 1.83. There is also a strong increase in life expectancy. At the beginning of the 80s, the latter reached 71 years, and today it has increased to more than 80 years.

In theory, the pay-as-you-go system could work and provide pensions similar to the salary that was received at the time of retirement. For this to happen, however, the growth of the labor force is expected to outpace those who are retiring, or that strong economic growth leads to higher wages in a way that active workers can pay higher contributions to finance the pensioners' pensions.

If today the contribution rate of an active person is 10% of his salary, in a pay-as-you-go system for that person to receive a pension that is equivalent to his salary, requires that there are 10 active people with a similar salary, where each have to contribute 10% to finance the pension of those who have already retired.

In 1980 people aged between 20 and 65 were in a ratio of 10 to 1 compared to those over 65. But in 2015, Chileans between the ages of 20 and 65 are at a rate of 6 to 1 compared to those over 65.
If in addition, the projections are that life expectancy continues to increase and the fertility rate will decrease somewhat, then the proportion of people over the age of 65 will increase even more than those between 20 and 65. By 2040, it is projected that this ratio will be less than 3 to 1.

And so, the burden on the working population, in terms of paying with a proportion of their salaries the contributions needed to the financing of retirees' pensions, will not be sustainable, and will lead to diminishing pensions; except the case that the system and the country increases its debt, or sells parts of its assets to finance the growing deficit that, due to the low number of contributors and an increasing number of beneficiaries, is being created in the economy.

I leave you with a question to comment: With the proportion of workers between the ages of 20 and 65 decreasing more and more, is it the right decision the tying the pensions to the contributions that can be made by active workers?

NO+ Reparto: por qué es inviable el sistema de reparto hoy


La baja natalidad y el aumento en la expectativa de vida explican por qué el sistema de reparto no mejoraría las pensiones.

En 1980, Chile tomó la decisión correcta de sustituir el sistema de pensiones basado en un mecanismo de reparto, por uno de capitalización individual. En un sistema de reparto, la población activa paga cotizaciones con las que se pagan las jubilaciones de los pensionados, y en uno de capitalización individual, los activos contribuyen con ahorros para construir un fondo propio que será usado para financiar su pensión.

La decisión de reemplazar el sistema de reparto por uno de capitalización individual respondió a la inviabilidad de sostenerlo en un contexto de tasas de fertilidad decrecientes, con una población cada día más sana y con expectativas de vida crecientes, lo que invariablemente llevaría al colapso de las cajas de previsión.

El funcionamiento del sistema de reparto está fuertemente influenciado por los cambios demográficos. En Chile hay una fuerte caída en la tasa de fertilidad. En 1960, una mujer tenía en promedio 5,6 hijos, en 2012, solo 1,83. También hay un fuerte aumento en las expectativas de vida. A inicios de los ´80, esta última llegaba a 71 años, y hoy ha aumentado a más de 80 años.

En teoría el sistema de reparto podría funcionar y entregar pensiones similares a la renta que se tenía al momento del retiro. Sin embargo, para que ello ocurra, se requiere que el crecimiento de la población activa supere al de aquellos que se están retirando, o que las tasas de crecimiento de la economía y de remuneraciones sean elevadas para que los trabajadores activos puedan contribuir con cotizaciones mayores.

Si hoy la tasa de cotización de una persona activa es del 10% de su salario, en un sistema de reparto para que ella pueda recibir una pensión equivalente a su sueldo, se requiere que existan 10 personas activas con un salario similar que contribuyan cada una con un 10% para financiar la pensión de quien ya se ha retirado.

En 1980 las personas con edades entre 20 y 65 años estaban en una razón de 10 a 1 respecto de quienes tienen más de 65 años. Pero, en 2015,  los chilenos entre 20 y 65 años están en una razón de 6 a 1 respecto de las mayores de 65 años.

Si, además, las proyecciones son de que las expectativas de vida sigan aumentando y la tasa de fertilidad disminuya algo más, se dará que la proporción de personas con edades por sobre los 65 aumentará aún más respecto de los que tienen entre 20 y 65. Para el año 2040, se proyecta que dicha razón será de menos de 3 a 1.

Y, con ello, la carga para lo población activa, en términos de contribuir con sus cotizaciones al financiamiento de las pensiones de los retirados, no será sostenible, y llevará a pensiones cada vez menores; excepto, que el sistema y el país se endeude, o desprenda de patrimonio, para financiar el déficit creciente que, por el bajo número de cotizantes y un número creciente de beneficiados, se va creando en la economía.

Les dejo una pregunta para comentar: Con una proporción de trabajadores entre 20 y 65 años que será cada vez menor, ¿es la decisión correcta amarrar las pensiones a las cotizaciones que puedan aportar los activos?





Tuesday, March 28, 2017

How did the US to contribute to global energy security?

Source: El Mercurio 28 de Marzo 2017, page B10

The technological innovation allowed the rebirth of the oil industry, and with that, it was able to stop price hikes.

Regardless of the most favorable scenario, Chile must continue to pursue cost-effective solutions to improve its energy security.

FEWER IMPORTS

The United States is one of the largest energy consumers in the world and was the first for many decades. At the beginning of the 1960s, it accounted for 35% of the world's primary energy consumption, and now 17.5%, surpassed by China which accounts for 23% of global demand. However, in oil and gas, the US remains as the world's largest consumer with almost 20% and 23% respectively, and is the third largest consumer of coal, with 10%.

China, for its part, accounted for 13% of global oil demand in 2015, compared to 3.5% in 1990, and is the largest consumer of coal, with 50% of world consumption, seconded by India with 11%. Regarding CO2 emissions, China accounts for 27.3% of total emissions and US 16.4%.

The US along with having a high level of energy consumption has also been a net importer, particularly of oil and natural gas, having imported up to 67% of the oil it consumes in the decade of 2000, a figure that now comes to 35%. This energy often comes from regions politically unstable and exposed to wars and conflicts.

The US decline in the percentage of oil imports in its total oil consumption is due, marginally, to a small reduction in domestic consumption, but above all to a significant increase in local liquid production from 6,785 thousand barrels per days in 2008 to 13,800 thousand barrels per days in 2015. In 2016, unconventional oil production accounted for more than 50% of domestic production.

How did they do it? It has been the technological innovation in the oil industry, in horizontal drilling and rock fracturing technology that began to bear fruit since the middle of the last decade, and which was followed by significant increases in productivity.

Depending on the region, the average maximum output of a well increased from about 100 barrels a day in 2007 to over 1,000 barrels a day in 2017. Thus, today a new unconventional well produces the same as was achieved with ten of these wells in 2007. This has led to significant cost reductions that have made the United States unconventional oil industry very resilient to lower oil price levels, and, at the same time, has acted as a break to new price hikes, despite the lower production quota agreed between the OPEC countries at the end of 2016.

THE NATURAL GAS

A similar situation has occurred with the production of natural gas, which has increased from 510 billion cubic meters in 2005 to 770 billion in 2015, generating surpluses that have open the door to US LNG exports.

The significant technological development in the oil and gas industry not only shook the US energy industry but also global energy markets, including renewables.

Another element that has been essential to the success of the US oil industry is that oil and gas are usually privately owned, with small landowners who partner with corporations to exploit resources, rather than being Government ownership as is the case in many countries.

The increase in oil and gas production and the lifting of export restrictions on US crude in December 2015 has led to exports of crude oil, refined products, and natural gas (LNG) to increase and to reach more countries.

According to projections from the US Energy Information Agency (EIA), by the end of this decade, the country will become a net exporter of natural gas. Something that was unthinkable a decade ago, after the country's consumption and dependence on imported oil increased while local production fell.

The world's largest economy has been and will be, for many years, a relevant player in global energy markets. The energy balance of the US, its policy and technology have led, among other things, to those regions that are abundant in oil and gas resources, often to see in the United States a stable market where they sell their products; other energy importing countries have also benefited from the greater supply of fuel. And, the technological change has contributed with innovations that have been able to apply in other regions.

WITH TRUMP IN THE WHITE HOUSE

With a new administration in the US federal government, it is important to read the orientation of that country's energy policy, and how it can impact global energy markets and security, international relations, technological change, and on the environment.

Since his arrival in the White House, Donald Trump has issued executive orders and has made announcements about the direction of policies during his term. In addition, on March 16, he submitted to Congress the budget proposal "America First: A Budget Plan to Make America Big Again." It proposes a decrease in the resources of several departments, including Energy (-5.6%), Interior (-11.7%), and the Environmental Protection Agency (-31.4%), all of them agencies that have interference in energy matters.

Of its announcements and executive orders, stand out those that look to give a boost to the economic activity and to take advantage of the country`s abundant energy resources, requesting:
·      Streamline the approval of projects that are of high priority for the country, such as those of energy infrastructure that allow to revitalize the economy activity and reduce energy costs.
·       Restrict new regulations and eliminate others, with the aim of relieving people and companies of regulations that inhibit growth and employment.
·      Review federal water and land use control regulations to facilitate access to energy resources.
·      Review the relevance of environmental protection and project development standards.
·     Review the emission and gasoline consumption standards to be adopted by the automotive industry.

And we expect:
·         Less stringent standards on coal-based power generation.
·        Reduction or elimination of subsidies to renewable energies.
·   In the development of new technologies, efforts would be concentrated on financing technological developments in basic science, at an early stage, canceling programs in which the private sector is better placed to finance research and development.
·        Elimination of preferential conditions that some technologies have regarding the protection of species in danger of extinction.
·         Review of the requirements of minimum percentages of biofuels in gasoline.
·     Reduction of the obstacles that have hampered the development of nuclear energy for electricity generation, seeking to facilitate the development of new technologies (nuclear reactors of smaller size or using thorium as fuel).
·         Revitalization of the development of hydroelectric projects.
·       Development of new infrastructure that would bring Canadian oil to the Michigan and Gulf of Mexico refineries.
·         A decrease in transport subsidies.

In addition, the President would have under analysis the permanence of the United States in the climate change agreement, agreed in Paris at the end of 2015, which establishes commitments to reduce greenhouse gas emissions.

With all the above, an increase in oil, gas, and energy production is expected, which would further lower imports, creating a greater supply of oil and gas in global markets.

HOW DOES IT AFFECT CHILE?

Chile imports about 70% of the energy used, more than 95% of the oil it consumes, and 100% of the liquefied natural gas (LNG) that reaches the Quintero and Mejillones terminals. The country is always very exposed to the vagaries of global energy markets. However, Chile will benefit from US contributions to these markets in the coming years.

A greater global supply of energy coupled with more competition would mean that the price of oil and other fuels will for some time be less influenced by agreements restricting supply from OPEC.

Regardless of the most favorable scenario, Chile must continue to seek cost-effective solutions to improve its energy security, reducing its dependence on what may occur in countries or regions exposed to political instability, and from potential price manipulations which can occur in global markets.


For a competitive Chile, the country must count on an energy matrix that assures reliability of supply, and with energy costs that are a competitive advantage of the country. And in this, Chile cannot renounce to use its main energy resources, within which is the hydroelectricity, and recently the wind and solar energy. These last ones do impose the challenge of requiring other sources to overcome the current limitation of not being able to operate continuously.

Source: El Mercurio 28 de Marzo 2017, page B10

On March 28, President Trump signed the Executive Order "Promoting Energy Independence and Economic Growth," which details the various rules and regulations that need to be revised or eliminated

Cómo lo hizo EE.UU. para contribuir a la seguridad energética global


El día 28 de Marzo por la tarde el Presidente Trump firmó la Orden Ejecutiva "Promoting Energy Independence and Economic Growth", que entrega el detalles de las distintas normas y regulaciones que deden ser revisadas o eliminadas.



Friday, March 24, 2017

Informal Economy: Is a street vendor an independent worker?



The problems of the informal economy are multiple: no taxes are paid, people have no social security and embeds unfair competition.

What is the informal economy? They are all those legitimate activities that citizens develop illegally, such as exercising trade, setting up an industry, developing transport activities, or building a home. It is not within the informal economy that activities that are directly illegal and harmful, such as drug trafficking and the reduction of stolen species.

Informality is accessed by institutional failures, of the State, where barriers are created that slow or make it very expensive to exercise these legitim activities in a legal way; Or because there is a lack of opportunities in the formal economy, as can occur in a scenario of deceleration with low or zero economic growth, where people do not find or lose their jobs, and are forced to develop informal activities to generate income.

The problems that lead to informality are multiple. On the state side, income is lost because these activities evade the payment of taxes, and people do not have social security, so they often become an additional burden of the state social benefits. On the side of people, they get low levels of income, have restricted access to the formal market for credit or financing, which greatly limits their chances of expanding or increasing their business or activity.

Likewise, those who carry out similar activities, but in the formal economy, face unfair competition, as is the case with established commerce, where they must pay taxes and comply with regulations, certifications, and regulations.

This last week it was known that in Chile the number of independent workers who work in the street exceed 384 thousand, and represent 4.67% of the total employed persons, being the highest figure since there are records in early 2010.

This news shows a daunting panorama of the opportunities that the economy and the labor market are giving, given that there is a growing number of people who do not find work in the formal market, and are forced to go out into the streets to work in very precarious conditions, which is appreciated by observing the sharp increase in street commerce.

The low growth rate of Chile, 1.6% in 2016 (Central Bank), and the drop in investment of -0.8%, which already adds a negative figure for the third consecutive year, responds to a scenario mainly explained by internal factors, since externally the projections of growth from the major economies have gone up.

In order to reverse this slow-growing and job-creating streak, there is an urgent need to improve the business climate, reduce regulations that inhibit investment, slow job creation, and growth. Informal employment, which disguises itself as the euphemism of self-employed workers, is a precarious, non-inclusive employment, and is the result of lack of institutional opportunities and failures as a result of poor public policies.

I leave a question to comment:
Do you think that the informal economy, such as street commerce, is the development path Chile should follow?

Economía informal: ¿un vendedor callejero es un trabajador independiente?



Los problemas que acarrea la economía informal son múltiples: no se pagan impuestos, las personas no tienen previsión social y se produce competencia desleal.

¿Qué es la economía informal? Son todas aquellas actividades lícitas que los ciudadanos desarrollan de manera ilegal, como ejercer el comercio, instalar una industria, desarrollar actividades de transporte, o construir una vivienda. No están dentro de la economía informal aquellas actividades que son derechamente ilícitas, como el comercio de drogas y la reducción de especies robadas.

A la informalidad se accede por fallas institucionales, del Estado, donde se erigen barreras que frenan o hacen muy costoso ejercer dichas actividades lícitas de manera legal; o porque existe una falta de oportunidades en la economía formal, como puede ocurrir en un escenario de desaceleración con bajo o nulo crecimiento económico, donde las personas no encuentran o pierden sus empleos, viéndose obligadas a desarrollar actividades informales para generar ingresos.

Los problemas que acarrean la informalidad son múltiples. Por el lado del Estado, se pierden ingresos porque estas actividades evaden el pago de impuestos, y las personas no cuentan con previsión social, por lo que suelen transformarse en una carga adicional de las prestaciones sociales. Por el lado de las personas, obtienen bajos niveles de renta, tienen restringido el acceso al mercado formal de crédito o financiamiento, lo que limita enormemente sus posibilidades de expandir o ampliar su negocio o actividad.

Asimismo, quienes desarrollan actividades similares, pero desde la economía formal, enfrentan una competencia desleal, como le ocurre al comercio establecido, donde deben pagar impuestos y cumplir con las normas, certificaciones y regulaciones.

Esta última semana se conoció que el número de trabajadores independientes que se desempeñan en la calle superan los 384 mil, y representan un 4,67% del total de personas ocupadas, siendo la cifra más alta desde que hay registros a inicios de 2010.

Esta noticia muestra un panorama desalentador de las oportunidades que está entregando la economía y el mercado laboral, atendiendo a que existe un número creciente de personas que no encuentra trabajo en el mercado formal, y se ven forzadas a salir a la calle para trabajar en condiciones muy precarias, lo que se aprecia al observar el fuerte aumento del comercio callejero.

La baja tasa de crecimiento de Chile, el 1,6% en 2016 (Banco Central), y la caída en la inversión de -0,8%, que suma ya una cifra negativa por tercer año consecutivo, responde a un escenario mayormente explicado por factores internos, dado que externamente las proyecciones de crecimiento han ido al alza.

Para revertir esta racha de bajo crecimiento y generación de empleos, se debe dar urgencia a mejorar el clima de negocios, disminuir regulaciones que inhiben la inversión, frenan la generación de empleos y el crecimiento. El empleo informal, que se disfraza con el eufemismo de trabajadores independientes, es un empleo precario, no inclusivo, y es el resultado de la falta de oportunidades y fallas institucionales como consecuencia de malas políticas públicas.

Les dejo una pregunta para comentar:
¿Crees que la economía informal, como el comercio callejero, es la senda de desarrollo que debe seguir Chile?



Friday, March 17, 2017

Vietnam, an economy in transition that seeks to embrace free market ideas



After World War II, in 1954 Vietnam was temporarily divided in two, with a promise of democratic elections in 1956 to unify the country, with a communist government in the north and a market-oriented economy government in the south. However, after a grueling war, the country was reunified in 1975 when North Vietnam achieved the withdrawal of US troops and took the control of Saigon, now Ho Chi Minh City.

The nascent Socialist Republic of Vietnam imposed a communist economic system, with significant state participation and a centrally planned economy, and state ownership of major companies.

However, the centrally planned economy model did not live up to expectations and the five-year plan of 1976 proved to be a failure. In 1986, the Communist Party of Vietnam changed its economic policy and introduced reforms similar to those of China. Thus, something already in the quinquennial plan of 1981, but particularly in the one of 1986, the authorities went towards more pro-market reforms.

Since the mid-1980s, Vietnam has enjoyed significant economic growth. Per capita income has increased from approximately US $ 500 in 1980 to US $ 2,150 in 2016, and the country has achieved an average economic growth rate of 6.4% for the period 1985-2015.

Gradually, the authorities have sought to become more integrated into the global economy, for example by joining the Association of Southeast Asian Nations (Asean) in 1995 and the World Trade Organization in 2006, and has also been opening up new spaces for private initiative.

However, today the country is at an important turning point, in which it requires increasing levels of investment, attracting private capital, and increasing the efficiency levels of its companies, which makes it necessary to move forward in structural reforms where the private sector takes a leading role in strategic sectors of the economy.

Its authorities face many and diverse challenges, such as moving quickly to a system of market prices and eliminate subsidies. For this to happen, it is essential to move forward in institutional reforms, where, among others, property rights are properly established and correct price signals are generated that are attractive to bring in the necessary foreign investment to generate more and better jobs.

In Chile, part of the history of the transition and challenges that Vietnam faces are known for us, it is like a déjà vu going back 40 years. And, while they are eager to learn from successful experiences on market-oriented reforms, and where Chile is a very attractive example, in Chile, instead of moving forward trying to improve what we have, we are faced with the fact that some people are pushing to change everything, with foundational reforms, to equations that propose for a greater participation of the State in the economy, and as is well documented, these formulas that did not work and have not worked anywhere in the world.

Vietnam, una economía en transición que busca abrazar las ideas del libre mercado



Después de la Segunda Guerra Mundial, en 1954 Vietnam fue temporalmente dividido en dos, con una promesa de elecciones democráticas en 1956 para unificar el país, con un gobierno comunista en el norte y uno promercado en el sur. Sin embargo, después de una cruda guerra, el país fue reunificado en 1975 cuando Vietnam del Norte logra el retiro de las tropas estadounidenses y el control de Saigón, hoy Ciudad de Ho Chi Minh.

La naciente República Socialista de Vietnam impuso un sistema económico comunista, con una importante participación del Estado en la economía de planificación centralizada, y con propiedad de las principales empresas.

No obstante, el modelo de economía centralmente planificada no cumplió con las expectativas y el plan quinquenal de 1976 resultó un fracaso. En 1986, el Partido Comunista de Vietnam cambió su política económica e introdujo reformas similares a las de China. Así, algo ya en el plan quinquenal de 1981, pero particularmente en el de 1986, las autoridades se encaminaron hacia más reformas promercado.

Desde mediados de los ‘80, Vietnam ha disfrutado de un crecimiento económico importante. El ingreso percápita ha aumentado aproximadamente desde US$ 500 en 1980 a US$ 2.150 en 2016, y el país ha alcanzado una tasa de crecimiento promedio de la economía de 6,4% para el período 1985-2015.

De manera gradual, las autoridades han buscado incorporarse más a la economía global, por ejemplo, integrándose en 1995 ala Asociación de Naciones del Sudeste Asiático (Asean), y en 2006 ala Organización de Comercio Mundial, y también ha ido abriendo más y nuevos espacios a la iniciativa privada.

Empero, hoy el país está en un importante punto de inflexión, en que requiere aumentar los niveles de inversión, atraer capital privado, y aumentar los niveles de eficiencia de sus empresas, lo que hace necesario avanzar en reformas estructurales donde sea el sector privado el que tome un rol preponderante en sectores estratégicos de la economía.

Son muchos y diversos los desafíos que enfrentan sus autoridades, como transitar rápidamente a un sistema de precios de mercado y eliminar subsidios. Para ello, resulta fundamental avanzar en reformas institucionales, donde entre otros, se establezcan adecuadamente los derechos de propiedad y se generen señales de precios correctas que sean atractivas para atraer la necesaria inversión extranjera que permita generar más y mejores empleos.

En Chile, parte de la historia de la transición y desafíos que enfrenta Vietnam nos resultan conocidos, como un deja vu. Y, mientras ellos están ávidos de aprender de experiencias exitosas sobre reformas promercado a nivel global, y donde nuestro país es un ejemplo muy atractivo; en Chile, en lugar de avanzar en perfeccionar lo existente, nos enfrentamos a que algunos bogan por cambiar todo, con reformas refundacionales, para reeditar fórmulas de una mayor participación del Estado en la economía, fórmulas que no funcionaron y no han funcionado en ningún parte del mundo.

Will Chile be able to leave the ICU?



In 2008, in a speech to businesspeople, Peruvian President Alan Garcia said: "We admire and appreciate Chile, for its experience, for its democratic coordination, for its growth, all we say is that we want to win it, we want to be better ... "Words that shook patriotic pride and have led Peru to be one of the most dynamic and fastest growing economies in the region.

Until 2013, Chile led the ranking with the best business environment in the region, above Peru, Colombia, and Mexico. However, today Chile is relegated to the fourth place, below these same countries. While this in part recognizes the efforts made by various economies to improve their business environments, the loss of Chilean leadership particularly accounts for poor reforms and announcements of change in political leadership made in the last few years. This has led to a strong detriment in the dynamism of the Chilean economy, where in the last three years growth has averaged a meager 1.9%, well below the 5.3% achieved in the previous four years.

The market-oriented model implemented by Chile has led it to be one of the countries with highest per capita income and human development ranking in the region. Where after a success development path followed in the last three decades, the country must have moved towards reforms of second-generation aimed at finding, with appropriate adjustments, the level of fine tuning to be achieved in the regulatory framework, in institutional development, and in correcting the market distortions that arise with development.

Unfortunately, recent years have been marked by reforms and ideas of destroying what exists, seeking to establish failed models that seek to grant greater control and interference to the state in economic activity and restrict the freedom of citizens.

Chile's greatest challenge is to be more innovative, to improve the efficiency and competitiveness of the country, and to advance second-generation reforms, giving more and no less space to the initiative and entrepreneurship of the private sector. Along with this, it is important to take care of the country's internal coexistence and the business environment.

It has been thanks to the market-focused development model that Chile is one of the region's highest per capita income countries, and that is why it was able to become a full member of the OECD.

The cost of bad reforms, as the tax and education reforms, and other bad reforms that have been boosted in recent years, coupled with a climate of increasing uncertainty and disrepute towards business activity, have led to the sacrifice of growth and the creation of good jobs. In this, the country has been left with a very bad result and damage in the well-being and security of each one of the Chileans.

For Chile to resume its leadership, it must advance in market reforms that promote investment and entrepreneurship, where the great beneficiaries will be the working people.

¿Podrá Chile salir de la UTI?



El año 2008, en un discurso ante empresarios, el Presidente de Perú Alan García, expresó: “Admiramos y apreciamos a Chile, por su experiencia, por su concertación democrática, por su crecimiento, lo único que decimos es que queremos ganarle, queremos ser mejores…” Palabras que sacudieron el orgullo patrio y han llevado a Perú a ser una de las economías más dinámicas y con mayor crecimiento en la región.

Hasta 2013, Chile lideraba el ranking con el mejor ambiente de negocios en la región, por encima de Perú, Colombia y México, pero hoy está relegado al cuarto lugar, por debajo de estos mismos países. Si bien ello en parte reconoce el esfuerzo que han realizado varias economías por mejorar sus ambientes de negocios, la pérdida de liderazgo de Chile da cuenta particularmente de las malas reformas y de los anuncios de cambio en la dirección política. Y ello, ha llevado a un fuerte detrimento en el dinamismo de la economía chilena, donde en los últimos tres años el crecimiento ha promediado un exiguo 1,9%, muy por debajo del 5,3% alcanzado en los cuatro años previos.

El modelo de mercado implementado por Chile ha llevado al país a ser uno de los de mayor ingreso per cápita y de desarrollo humano de la región. Después de esta primera etapa de crecimiento, el país se debió encaminar en avanzar con reformas de segunda generación que apuntaran a encontrar, con los ajustes apropiados, el nivel de sintonía fina que se debe alcanzar en el marco regulatorio, en el perfeccionamiento institucional, y en corregir las distorsiones del mercado que surgen con el desarrollo.

Lamentablemente, los últimos años se han visto marcados por ideas de destruir lo existente, buscando instaurar modelos fracasados que buscan otorgar un mayor control e injerencia al Estado en la actividad económica y restringen la libertad de los ciudadanos.

El gran desafío de Chile está en ser más innovadores, mejorar la eficiencia y competitividad del país, y en avanzar en las reformas de segunda generación, otorgando más y no menos espacio a la iniciativa y emprendimiento del sector privado. Junto con ello, es importante cuidar la convivencia interna del país y el ambiente de negocios.

Ha sido gracias al modelo de desarrollo enfocado en el mercado que Chile es uno de los países de mayor ingreso per cápita de la región, y también por ello es que pudo acceder a ser miembro pleno de la OCDE.

El costo de malas reformas, como la tributaria, educacional y de otras que se han impulsado en los últimos años, junto a un clima de creciente incertidumbre y descrédito hacia la actividad empresarial, han llevado a sacrificar el crecimiento y la creación de buenos empleos. En esto, el país ha salido con un muy mal resultado y daño en el bienestar y seguridad de cada uno de los chilenos.

Para que Chile retome su liderazgo, debe avanzar en reformas de mercado que promuevan la inversión y el emprendimiento, donde los grandes beneficiados serán nuestros trabajadores.

The rejection of the Dominga project is a bad signal


The recent rejection of the Environmental Qualification Resolution of the Dominga project, which had a favorable recommendation of approval by the Environmental Assessment Service of the Coquimbo Region, is not a good signal and do not contributes to improve the business environment for the development of mining projects in the country.

Dominga, with an estimated lifetime of 26.5 years, investment of US $ 2,500 million, which would employ about 10,000 people in the construction phase and 1,500 people during the operation, and a production of 12,000,000 tons of iron concentrate and 150,000 tons of copper concentrate per year, has been rejected at the regional level, after three years of evaluation. Their owners, if they want to persevere with this project, must try their luck in the Committee of Ministers, to see if in this political instance they have the chance of reversing the decision.

Natural resource-rich economies have an additional source of growth, but it is not always well exploited, and what is worse, often ends up becoming a curse rather than a blessing.

In the last decade, the GDP of the mining sector has represented between 10% and 25% of the national economy, and mining exports represent more than 50% of the total country exports, with a contribution to the government revenues that has fluctuated between 6% in 2015 and 34% in 2006.

Unfortunately, in recent years, investment in large-scale mining has fallen from US $ 15 billion in 2013 to US $ 10 billion in 2015, and the number of jobs in the mining sector has fallen from 885 thousand in 2013, within direct and indirect jobs, to 710 thousand in 2016. In part this responds to the fall in the price of copper and other minerals in international markets, but there are also important internal factors, such as the large increase in production costs locally. Above all, there exists a sharp increase in labor costs, own and contractor, which has increased from 20% of total costs in 2005-2007 to 60% in 2014; and that in a significant way responds to a capture of the mining revenues by their workers, in detriment of higher incomes for the fiscal coffers, the shareholders of the companies and the country. Also, and along with rising costs, the conditions for the development of mining projects have deteriorated visibly, as shown by the Fraser Institute's index of attractiveness for mining investment, where the country was surpassed by Peru. If in 2015, Chile was ranked 11 and Peru 36, in 2016 Chile falls sharply to the 38th place and Peru rises to 28 in the ranking.

The deterioration in the ranking of Chile in its attractiveness for mining investment is not an isolated fact, and adds to the deterioration of the country's position in other international indicators or rankings, such as the Doing Business or the productivity ranking, among others, which should be a matter of deep concern regarding the future development of the country. The rejection of Dominga only makes this situation worse.

El rechazo al proyecto Dominga es una mala señal


El reciente rechazo de la Resolución de Calificación Ambiental del proyecto Dominga, que contó con una recomendación favorable de aprobación por parte del Servicio de Evaluación Ambiental de la Región de Coquimbo, no es una buena señal ni contribuye a mejorar el ambiente de negocios para el desarrollo de proyectos mineros en el país.

Dominga, con una vida útil estimada de 26,5 años, inversión de U$ 2.500 millones, que daría empleo a cerca de 10.000 personas en la etapa de construcción y 1.500 personas durante la operación, y una producción de 12.000.000 toneladas de concentrado de hierro y 150.000 de concentrado de cobre al año, ha sido rechazado a nivel regional, después de tres años de evaluación. Sus dueños, de querer perseverar, deberán probar suerte en el Comité de Ministros, para ver si en esta instancia política logran revertir la decisión.

Las economías ricas en recursos naturales cuentan con una fuente adicional de crecimiento, pero no siempre es bien aprovechada, y lo que es peor, muchas veces termina transformándose más en una maldición que en una bendición.

En la última década, el PIB del sector minero ha representado entre el 10% y 25% de la economía nacional, y las exportaciones mineras representan más del 50% de las ventas totales al exterior, con un aporte al fisco que ha fluctuado entre el 6% en 2015 y 34% en el año 2006.

Desgraciadamente, durante los últimos años, la inversión en la gran minería ha caído desde US$ 15mil millones en 2013 a US$ 10 mil millones en 2015, y la cantidad de empleos del sector minero se ha reducido desde 885 mil en 2013, entre directos e indirectos, a 710 mil en 2016.

En esto ha incidido la caída del precio del cobre y de otros minerales en los mercados internacionales, pero también existen factores internos importantes, como el gran aumento en los costos de producción.

Pero, por sobre todo, ha existido un fuerte incremento en los costos de remuneraciones propias y de contratistas, costo que ha aumentado desde un 20% de los costos totales en el período 2005-2007, a un 60% el año 2014; y que de manera importante responde a una captura de las rentas mineras por parte de los empleados, en desmedro de mayores rentas para las arcas fiscales, los accionistas de las empresas y el país.

También, y junto con el aumento de costos, las condiciones para el desarrollo de proyectos mineros se han deteriorado visiblemente, como da cuenta el índice de atractivo para inversión minera que publica el Fraser Institute, y donde el país fue superado por Perú. Si en 2015, Chile ocupaba el lugar 11 y Perú el 36, el año 2016, Chile cae estrepitosamente al lugar 38 y Perú sube al 28 en el ranking.

El deterioro en el ranking de Chile en su atractivo para la inversión minera no es un hecho aislado, y se suma al deterioro de la posición del país en otros indicadores o rankings internacionales, como, por ejemplo, el Doing Business o el ranking de productividad, entre otros, lo que debe ser materia de profunda preocupación respecto del desarrollo futuro del país. El rechazo a Dominga solo empeora esta situación.