WITH LOW PRIVATE INVESTMENT LEVELS AND AN ECONOMIC DOWNTURN, CHILE IS GOING THROUGH A COMPLICATED ECONOMIC PERIOD. SEBASTIÁN CLARO, BANCO CENTRAL’S ADVISOR, BELIEVES THAT REGAINING TRUST FROM THE CHILEAN PEOPLE IS VITAL IN ORDER TO REVERSE THIS NEGATIVE TREND IN INVESTMENT.
SANTIAGO — The Sociedad Nacional de Agricultura (SNA) organized a conference ‘How is 2015-2016 coming up?’ to discuss Chile’s current economic situation and immediate future, reported Emol and La Tercera.
“Our economy, that for decades brought progress and an increasing sense of well-being to all Chileans, now struggles to reactivate itself” declared Patricio Crespo, SNA’s president, wrote La Tercera.
Banco Central’s advisor, Sebastián Claro, explained that “Chile’s economy […] has gone through a great cycle in terms of mining investment, but now, this cycle is ending and it is necessary to stir up non-mining investment” in order to stimulate GDP, reported Emol.
At the heart of the problem lies the shrinking amount of private investment, which has declined a lot in recent years, pulling down the country’s GDP. In Sebastián Claro’s opinion, this is mainly due to a lack of trust in the country’s economy and institutions.
In the last trimesters, the index showing the confidence in business institutions has fallen. For Claro this “reflects Chile’s deteriorating investment climate”, wrote Emol.
“Gaining back confidence is necessary in order to promote private investment, but it is also necessary to focus on more fundamental causes of this declining non-mining investment” declared Claro at the conference.
In Patricio Crespo’s opinion, the Chilean economic slowdown comes from the structural reforms, that were carried out by the government, reported La Tercera. More precisely, the Union’s president pointed at the tax and labour reforms.
Like Claro, Crespo associates this economic slowdown to a state of general uncertainty partly caused by a “badly designed tax reform, which resulted from a rushed agreement as it was formed in a context of urgency.”
He also argued that the main cause to the country’s declining economic performance is the “incomplete” labor reform, which in his opinion “goes against international rights and principles of non-discrimination, as well as against syndical liberty and the freedom of association.