Inversion Y Desarrollo Con Luis Velasquez 249. Chile, Un País En Democracia Y Desarrollo

Welcome to Investment and Development, today we will talk about the topic: "Chile, a Country in Democracy and Development". For this we count with the visit of Dr. Álvaro García, who was the Economy Minister, Energy and Mines Minister and Secretary General of the Presidency of the Republic of Chile. Dr. García, Welcome to Guatemala. Thank you very much, a pleasure to be here. Thank you very much for sharing these experiences of Chile and all the support. Which have been the main advances in Chile in the last decades? Chile has had a period of great economic growth, it tripled the level of income per person in the last 20 years, and that of course brought a lot of positive things, among them a very radical reduction of poverty. In the year 90 poverty had bordered 50% of the population and nowadays it is 10% of the population. I believe that the construction of agreements and certainly it is in the Chilean experience, is the cement over which this program is founded. If there are no agreements, there is no stability in the effort that the country has to make to progress, from government to government policies go changing. I think that the great advantage of concertation was first to construct an agreement within the coalition of parties, parties that didn´t have a story of team work. After the civil society, entrepeneur and union sectors and that extended for a period of 20 years. Today there is a government of opposition to concertation, nevertheless it followed the same route, because it was already proven that it was effective. In Guatemala for example, we have the Social Economic Council, which serves us to be part of the agreements and national consensus. What model does Chile use for those issues? First let me tell you that I greatly appreciate the effort that the Economic and Social Council in Guatemala, is starting. You don´t have to ask for immediate results to an institution that was born a few months ago. In Chile we passed by a similar experience before the new Government of Concertation took charge in the year 89, business and union leaders, with regard to the general characteristics that the economic model would have. The economic model in Chile in that period was a model in dispute and this agreement allowed us to set a route which is the one followed until today. Later around each of the reforms of relevance that have happened in Chile, when Chile decided to sign an enourmous amount of Agreements of Free Commerce, today they have them practically with all the countries in the world and it is normal to have Agreements of Free Commerce, at the beginning of the 90s, that was not the case. When they made the reform to social security and to health, the tributary reform, everything was done on the basis of vast agreements, in Chile we call them "Presidential Commissions". The President invites groups of diverse political and social origin to sit at the table, to develop the reform, and the reform originates from this agreement and after that it is sent to Congress. When it gets to Congress it will already have a very big social and political consensus which allows that this becomes a reality. Interesting the model that is being used and it has shown that Chile goes from the theory to the practice since several years ago. In your experience in the diverse Ministries. How does the public administration have to implement a strategic planning based on results for the good functioning of a government? I think that it was one of the greatest innovations that brought the concertation to Chile and it was one of the first countries in the world that implemented a system of budgetary planning regarding these concrete goals. In the year 90, President Aylwin in that opportunity created the Ministry of the Presidency that didn´t exist and it had as the main objective to work with the team of the Government, to define specific, quantifiable goals, with a definite temporality, for each of the public distributions and resources were assigned according to the goals. These goals were followed in a quarterly basis by the President of the Republic himself, who had of course a statistic system that accompanied him. He met with the Ministers, the Ministers explained why they achieved or not achieve their goals, Parliament was simultaneously informed, so that the Parliament with information could develop its audit work. Some years later even the goals started to associate to the remuneration of the public sector. Therefore when an institution achieved its goals, it had two immediate benefits; One, its officials earned more. Two, had a prize budget for next year, to be increased the budget. The contrary of what would happen with the ones who did it wrong, they had a punishment in the budget that would reduce their action capacity. Interesting, because this administration by results gives benefits and obviously the towns get closer to their government. What do we have to do in the public administration? Obviously to develop a country is an enormous task that can take generations, but if we prioritize the public policies that we have to impulse. And what sectors should be the most prioritized, in such a way that we achieve the integrated development and that we advance in the achievement of the objectives of the Millenium? I would distinguish different areas; One, is the public sector. In my judgement the public sector in Guatemala has a long way to go in efficiency and transparency. Two, key changes in that sense of strengthening the civil service, that there won´t be the personnel rotation that exists nowadays. And develop a system, and this is happening with my information, it links the budget and the budgetary discussion surrounding the concrete objectives that later on are evaluated and that all that information be transparent for all the citizens. The second one is more a challenge for the country, a governmental challenge. Guatemala requires to increase significantly its investment, to grow at a higher rhythm. Guatemala is the country where the annual population grows the most in Latin America and therefore it has to have an effort of investment and growth higher than the rest. The truth is that up to now, the opposite is occuring. It is a challenge that can only be taken jointly with the private sector, attracting foreign investment. I would say that in the case of Guatemala, the needs for investment are focused in 2 areas. Its people, improving the health services, and education and its infrastructure; transport, energy, and telecommunications. Without that there doesn´t exist a floor to progress. Of course, they are fundamental elements, that have to be in a vision of the country in punctual actions through the public policies. Let´s go to a commercial break and then we will continue with Investment and Development. Let´s continue with Investment and Development. Governing a country is not an easy task, satisfying the different sectors is an even greater challenge. But there are also a series of indicators where we see South American countries have a greater acceptance of their Governments and the democracy there exists. Nevertheless the Central American countries and in this case Guatemala is of the last ones in that table. What should we do so that our people is more satisfied with democracy and with the Governments and at the same time with the tasks that the state is developing? Not long ago the study for the United Nations Program for Development ended, which was exactly looking for the answer to this question. What is it that satisfies the citizens so that they can support democracy? And the answer was more than clear. When the citizens feel that their rights, those rights that the Constitution recognizes, that the laws recognize, are being guaranteed, they believe in the system and support the system. When the system doesn´t respond to what it has promised to the people, people stop believing in it. And that is precisely what we have in Guatemala, in the study we made in effect Guatemala is among those countries where the people believes less in democracy, they feel less satisfied with democracy. And objectively it´s among the two countries, next to Honduras, where people´s rights are less guaranteed. Therefore, the answer is to do what we promise, if we tell people that they have certain rights, we have to guarantee them. In Latin America we have a very bad habit and it is not in Guatemala. And it that we do laws without thinking in our reality, so the laws say that we are going to give everything to everyone. Quality Universal Education for all the children, good health for all the population. We are not in the conditions of doing this several times, I wish we were. It is better to tell the truth, that we can fulfill those rights to a certain level, than painting a marvellous world which people prove that it´s not possible. But I would like to take advantage of this question to make a comment about Chile. Why are we living in Chile a very particular moment, in spite there has been a very significant progress and that the Chilean economy keeps growing at a very healthy rhythm, you have probably seen in the television, there is a lot social discontent. There are student demonstrations, the indigenous people are being very active, etc. And we are learning that with progress, new problems arise. Ten or fifteen years ago in Chile, when we said poverty is falling from 50 to 30, to 20, to 10, people were satisfied, but nowadays they want other things, because they know that the country can give other things. Before they were satisfied with a good secondary education, now they want to have access to university and they want to have a good university education. They were satisfied with a job, now they want a good job, a good city, good urban infrastructure. The needs go changing with development and so the demands for the governments also change. It doesn´t mean that once you get to a certain level, people will be simply quiet, people will want new things. They will always have aspirations, but if they are in the line of economic, social and human development, you will surely take the nation to be a developed nation. And I learned a very important lesson in that sense, there is an interesting worldwide study that proves it. When the countries get to around the US$ 15,000 Per Capita, which is the level that Chile has nowadays, aspirations change. Up to that level what people want is more, from that level up what people want is better and more equity. It does´t really matter that much to keep on having money, what they want is for there to be more justice, what they want is a better climate. So then, the type of problems that Governments have to look after, also change. And that is the challenge that the statesmen have. Nevertheless to get to those levels of incomes Per Capita that you´re talking about, the element of transparency, the erradication of corruption and the institutionality are fundamental factors. We can´t keep on having corrupt societies, corrupt Governments, where around a 30% of the national budget is going to those categories. What should we do to transparent the public expense and with that also strengthen institutionality and the results of public administration are given by results that you were speaking previously? What you have to do is what you just said, this is; Transparent the public expense and its objectives. When you discuss the budget in Guatemala, what you discuss is about money. We are going to give a lot of millions to the Ministry of Education, these amount of millions to the Ministry of Health. And of all of these millions will be divided into remunerations and investments, this is everything the budget in Guatemala says. What we have to start to do and is being done is that these millions that are given to the Ministry of Education have to associated to objectives. We are going to give you a certain amount of millions to improve in 10% the quality and we are going to measure this through a Reading and Math test, which is done every year. And at the end of the year we will evaluate if it was the 10% or not and if it was not a 10% we are going to ask the Minister to explain why the goal wasn´t achieved, that radically changes the conversation. Because when we only speak about money, at the end of the year the Minister can say yes, I spent all the money. Now, in what did you spend it? We don´t know. But if at the end of the year they ask. And did the quality of education improve? There they will have to explain what they did with the money, how the money was used. and that changes the conversation and the level of information that the citizens have and the Parlament and how the things done by the government are controlled. Transit is what is called "Governing by Results" it´s the way of introducing transparency and efficiency. And from there the importance of strategic planning, objectives, goals, action plans, measurement indicators and the dashboard to be able to administrate. Chile is a success case on the part of complying with the objectives of the Millenium, it is the first Latin American country in achieving this. What should we do in Guatemala to follow these programs and model projects to come out from poverty? In effect Chile advanced a lot and I would recognize 2 stages in the process. A stage where the main variable explained why poverty was reduced and there was an advance in the objectives of the Millenium, it was the example. During the first 10 years of the concertation, 80% of the advance in overcoming poverty, it was explained for more and better jobs and that is a synonym of more and better investment. Synonym of Investment and Development. Exactly. During the second half of the Governments of concertation, progress was more associated to social policies. There was a great educational reform, a very important health reform, a major reform in the pension system and these 3 reforms were associated to what we were talking at the beginning. Oriented to guarantee rights and not abstract rights, it was not saying all Chileans have the right to health, on the contrary. It was said that all Chileans have the right, at the beginning, to 30 benefits. If somebody has cancer he has the right to be treated in a timely manner. If somebody has to have to be operated on for appendicitis he has the right to be treated in a timely manner. There were other pathologies that were not in the list and they were not object of a right, with time they have been incorporated, but where the right was guaranteed, they were complied. The same was done with the reform of the pension system, where a right was established that all the population, having worked during their life or not, had the right, a basic pension with a defined amount. And therefore, the citizens could judge with clarity if their right was being guaranteed or not. Here is the difference, when a Government focuses towards the development of its society. Let´ss go to a commercial break and then we will continue with Investment and Development. Let´s continue with Investment and Development. Mr. García, the part of insecurity plays an important role which should be rooted in society. What has Chile done to be able to combat this huge cancer that exists and that affects the majority of countries in Latin America? In Chile it hasn´t been erradicated, it still is a pending challenge, not with the magnitude that we live it in Central America, but it is the main worry for the citizens. I would say that it has different origins, there is an own insecurity of the organized crime, which is the one that is seen the most in Chile. And there is a worst one in my judgement, which is more linked to drug trafficking and its aftermath, which is more proper than what I believe is lived in Central America. This second problem is of great significance and I think it´s very hard to assume from a national perspective. Or it is assumed through an international effort that significantly involves the countries that consume drugs, in this case the United States, or I think it´s very difficult to solve this. I liked the iniciative that President Otto Pérez assumed, of posing the issue of legalizing marijuana, not because I believe that this is the solution, but because it immediately caught the attention of the United States. And if the United States doesn´t truly commit with this problem, we will not find solutions. If regional solutions are needed that go beyond all the efforts of a country for the magnitude of the investments. In the economic issue, Chile has greatly advanced as we have already commented. And in Investment and Development we have had the opportunity of interviewing 17 Ex presidents of Latin America and we see that in South America there is a common denominator, the utilization of natural resources, petroleum, energy and mines. The main motor of Chilean economy is copper, in the mines. What has been implemented to take advantage of these natural resources, to reduce social conflict and with this to create those jobs that you were talking about in the first 10 years and keep on growing? Very good question, because I think it is very contingent to Latin American and Guatemalan reality. First Chile in that sense, is an exception, because Chile lives on its own mining since 200 years ago, therefore, it is part of our traditional culture, there is no questioning mining in Chile. President Allende 50 years ago spoke about mining like the salary of Chile and that is how we Chileans understood it, therefore there isn´t a degree of difficulty that exists in other countries. But if you observe nowadays the 6 faster growing economies in the world, 3 are Latin American; Peru, Chile and Colombia. If you see these 3 economies, their development pillar is mining. Therefore, not taking advantage of the world situation that we´re living of high prices of the natural resources, is in a way, shooting your feet. This is not forever and we have lived it several times throughout our history. Guatemala is a country rich in minerals, with a great energy potential that can be taken advantage of for its development and which I believe it is not completely being used, because the country has still not understood. I think that there is only one way to do this and it is that the country understands the contributions that will reach each one of them through these processes. That conversation has not occurred in Guatemala, people don´t understand how they will mining reach them, and they don´t understand for good reasons, because the instruments so that the resources that come from mining get to people, are not defned. I think that people don´t understand the importance of increasing the energy supply either, because they don´t understando the link between jobs and energy. And if these things are not explained and if they are not talked about, social conflict will persist. It is urgent in Guatemala like in other developing countries, a national dialogue to educate citizens, to know their opinion and therefore to generate the possibility of taking advantage of the riches that Guatemala has and is losing nowadays. Of course, we have a great challenge to transfer to the citizens the different benefits and how to take advantage of all these natural resources. The rural development is a challenge, but more than laws that have been proposed, it´s not a question of laws, it´s a question of public policies, of attitude. What should we do to take advantage of these strengths and opportunities that are in the rural areas, to promote the entrepeneur spirit in everyone, in the different countries and to generate integrated development? First, I would say that here in Guatemala there are two rural areas. There is a productive rural area linked to the export sector, where we see progress and there is rural area where subsistence is scarce and these are two very different realities. For the modern rural area infrastructure is required to keep on taking advantage of its export potential. But the rural area of poverty requires an integrated attention; To improve the health services, improve the quality of education, mprove the transportation infrastructure, to give access to credit and training so that productiveness of the farm sector increases, give attention with food programs so that the children don´t keep being malnourished. And if you don´t act in an integrated way, we will continue in this unacceptable situation that a great majority of children in the rural areas of Guatemala are condemned to live poorly, because they don´t even reach the minimum nutritional levels during their childhood. Chile has proven to be a good player when they are in a team which the different countries of Latin America, they even have the Pacific Arc Alliance. What do we have to do as Guatemala, Central America and the Caribbean to generate this local development for each country and as a block and region? Central America was one of the first integration agreements given in America, but it is still in a precarious moment. In this opportunity in Guatemala, I heard a very good exposition done by the Secretary of SEGEPLAN, nowadays the Foreign Minister, on development of Guatemala up to the year 2032. Thinking about Guatemala as a communication channel withing the main markets of the world. I have to go to El Salvador, precisely today, I´m leaving for there to discuss exactly the same project, El Salvador, the communication channel within the main markets of the world. Panama is not only talking, but also doing it. Everyone will not be on their own the channels or they agree or they do it together in an environment where there is a real opportunity or the only thing they will do is to compete between themselves and void each other. This good infrastructure of Central American agreements that exist, have to pass to the stage of concrete agreements, that make countries commit. With all this accumulated experience of Chile and the issues we have covered, their different experiences in Latin America. Finally, what are the major worries, the main challenges? What is the final message that you leave us, so that we can manage to redirect our countries in the democracy era, so that we can take advantage of all the benefits of the XXI century, but that we also have better societies? Approximately 5 years ago when I came to Guatemala after a long period of not coming, I found a friend who told me the problem of Guatemala is that the phones are not working. The telephones I said, no he said, communication between people, that to my judgement is the problem. As long as this society doesn´t really converse withing its actors and makes a commitment a common will between them, there will be no progress. Here nobody is capable on its own of bringing a country forward; The Government is not capable, the entrepeneurs are not capable, civil society is not capable. You require a real conversation, not simply sitting down to talk and tell each other nice things, but placing the interest of the country on top of everything, to commit everyone´s effort, with the confidence that the other one is rowing in the same direction. I think that this confidence doesn´t exist and that those communication channerls don´t exist. That is why I like the effort that CES is doing, there I see a germ of institutionality that can lead this country forward. By the way there are a lot of other challenges, but the first one is to really converse. Of course, conversing with the truth, with will, and with a spirit of achieving consensus and making decisions as a nation. Dr. Álvaro García, thank you very much for having been in Investment and Development, for having been in Guatemala, we expect you to come again in a future opportunity. Thank you very much, it´s a pleasure. It has been very interesting to share part of all the trajectory of an Ex Economy Minister, Ex Energy and Mines Minister, Ex Secretary of the Presidency, Dr. Álvaro García, who has come from Chile. And without doubt all our viewers in the different countries of Latin America and the Caribbean that are watching us, will be able to make their own reflections. We´ll see you next week in an interesting program as the one today.