The Situation of Uncertainty in Chile Generates Distrust in Foreign Investment and Threatens the Economic Future of the Country, Finds Study by Instituto Coordenadas

MADRID, Dec. 5, 2019 /PRNewswire/ -- Chile is in danger of yielding to social pressures of the most radical and violent sectors that lead the protests, which would lead to a competitiveness loss within international markets and a distrust of the business class. These are the main conclusions of the study that the Instituto Coordenadas de Gobernanza y Economía Aplicada has carried out and presented yesterday in the Club Financiero Génova of Madrid its Vice President and General Director, Valeriano Gómez, the Executive Vice President, Jesús Sánchez-Lambás, and the Director of Analysis, Carlos Díaz-Güell.

The Executive Vice President, Jesús Sánchez-Lambás, recalled that Chile remains one of the strongest and solvent countries in Latin America, despite its excessive dependence on raw materials, which leads the country cyclically to recessions in its economy. "Since October, street violence has put the Chilean government in check. A social discontent that seems to spread throughout the world in a context of several countries that have been the scene of anti-government protests with a high degree of violence such as in Bolivia, Colombia, Chile and also Hong Kong," said Sanchez Lambás.

In this direction, the Executive Vice President of the Instituto Coordenadas pointed: "The protesters, with legitimate demands, are exceeded by small radical groups that turn the public space of coexistence into a war scenario that ends up forcing governments to succumb their pressures. This, is the case of Chile, can give rise to terrible consequences at a social and macroeconomic level. Ceding to populists' tendencies and making inappropriate decisions of social market economies, Chile will lose foreign investment that has helped to create jobs, develop infrastructures, improve the quality of services and, ultimately, reduce social inequalities".

Concern about Chile's future and Latin America has been the axis that has triggered this work, explains Sánchez-Lambás. "Chile must face important reforms that precisely help to continue promoting businesses' creation and foreign investment. It cannot cede to street violence, it must continue to be a leader in the region", he concludes. 

Chile is an example within the economic liberalism, a model that has consolidated a strong and stable macroeconomics that has enabled progressively to reduce social inequalities.

For this reason, Chile must continue betting on powerful economic policies that stimulate investment and business development. A stimulus that must be accompanied by a simplification of control mechanisms and excessive bureaucratization that currently restricts the activity of concessionary companies in Chile. The country must bet on industrial diversification, try to leave behind the dependence on copper, and try to open to other sectors that allow creating quality employment with specialized human capital.

In this sense, the General Director of the organization, Valeriano Gómez, noted that the economic analysis presented by the Instituto Coordenadas, plural and non-partisan, is a small starting point to advance in construction, leading the fusion between the essence and the innovation of the economic liberalization, as the best model to face the present and future challenges of Chile and the world.

In the presentation participated too the Instituto de Coordenadas Analysis Director and one of the authors of the report, Carlos Díaz-Güell. To what has already stated by his colleagues, Díaz-Güell added that Chile presents important deficiencies in R&D, as well as a low-qualified labor and a still insufficient infrastructures network and energetic services.

The author said: "For Chile, it is a priority to invest in innovation and improve the formulas of collaboration between the State and the private sector and must enhance the labor market in order to professionalize it. To keep the economic growth levels and that these result in greater social equality, Chile must reduce external risks, opting for labor mobility, improve the pensions system, strengthen the financial system and bet on fiscal consolidation through a fair tax system".