Remarks: Public Presentation - Sebastián Piñera, President of Chile

 

CARLOS HONORATO: Good afternoon. Thank you. Hello, distinguished appointees, ambassadors, members of the Chilean delegation, American representatives, friends of Chile. On behalf of the Americas Society-Council of the Americas, ProChile – the Chile promotion group – and Corfo, the Chile Economic Development Agency, we want to welcome you to the Center for Innovation and Investment Opportunities in Chile.

My name is Carlos – (audio break) – and as the deputy director of ProChile, it is a great pleasure to be here today. We want to thank – (audio break) – the Americans who partnered with us to make this event possible. ProChile has been promoting, for more than 36 years, our export products and services among all industries. And now there is, through its 56 offices around the world – five of them in the U.S. – has been also promoting investment opportunities, working closely together with Invest Chile from Corfo, the Chilean Economic Development Agency.

Our main speaker today will be the president of Chile, Mr. Sebastian Pinera Echenique, who will be introduced by Susan Segal, president and CEO of the Americas Society-Council of the Americas. But to begin, let me introduce you to our first speaker, Mr. Hernan Cheyre. Mr. Cheyre has an undergraduate degree in economic sciences and business administration and a Master’s degree in economics at the University of Chicago. He has had a very successful career in the private sector as a consultant and as the director of a variety of companies.

He has also been a university professor in the areas of public finance, social project assessment and microeconomics. Since March 2010, Mr. Cheyre has held the position of executive vice president and CEO of Corfo. It’s a pleasure to me, and please let’s give a warm welcome to Mr. Hernan Cheyre. (Applause.)

HERNAN CHEYRE: Well, good afternoon to all of you. Thank you, Carlos, for this introduction. Well, my presentation will be a sort of appetizer. The main course is the presentation of the president. So I want to warm up a little bit in terms of some basic speeches about the Chilean economy. And the title of my presentation is “Chile: What Makes the Difference?”

And basically, Chile, in the context of the world – yes, it had a rougher year. When you consider the global GDP of Chile, the left-hand side of that diagram, it’s very small. The red bar is only 200 billion, which for the status of the world is not very much. But if you go to the right-hand side and you consider the GDP per capita, it’s 15,000. It is somehow different. And if you compare it with the other countries, with the situation of our neighbors in South Americas, certainly it is different and it makes a difference.

And what is the main goal that President Pinera will address to you? We want to be a developed economy by the end of this decade. That means to jump from $15,000 per capita to 23,000 (dollars), which is the red bar. So we need to jump, as that guy with the Chilean flag – and you can see what are the other countries over there. So that is our main goal.

And how do we want to do this? Basically, though innovation. Because you have heard a lot about the fiscal situation of Chile – I’m going to say something about that, about the solid macroeconomic figures, about a robust free-market economy, so on and so forth. But there is something very special. We want to become a regional hub in Latin America for entrepreneurship and for innovation.

You can see the different arrows coming from Chile to the rest of the world. We have very close ties to different cities and areas of the world who are also big, very important in terms of innovation. We want to strengthen that. And we’re convinced that through innovation, we will be able to raise productivity of the economy. And raising productivity, the rate of growth will be much higher, and therefore our goal – our dream – being a developed economy by the end of the decade will be possible.

And if you consider, well, what are the basic pillars, we could say: Well, there is high potential for economic growth, sound fiscal accounts, a good constitutional framework and political stability. We talk about potential for growth. This year the economy will be growing 6.5 percent, which is one of the highest in the OECD countries. Next year, because of international turmoil, probably the rate of growth will be lower. And we think it will be close to 5 percent. That is a very good rate of growth.

Political stability: Not every country can show the political stability, the consensus on some basic issues, as Chile has today. Of course there are differences. But those differences can be channeled through the institutions that we have.

(Audio break) – framework. In my opinion, this is one of the most important pillars. What do I mean by that? By good institutional framework, I mean that things like the rule of law apply in Chile. Even the word is valid before you sign a contract. I have nothing against our neighbors in the region, but of course, I think that makes a difference in favor of Chile.

And if you want me to say a few words in terms of the fiscal accounts, fiscal deficit – well, Chile is very in the left part of the diagram, with almost zero. And you can compare it with the other countries. You can see their names – very big names. And for the rest of the decade, certainly, this will be the main problem. Most of the countries will have to cut expenditures, will have to suffer adjustments – internal adjustments – that will make their domestic consumption lower a little bit.

Chile doesn’t have that problem, so it is in good shape to receive investment. It is in good shape to do new business. It’s precisely because of the soundness of its fiscal situation. And on top of that, if we look to the gross public debt – which is a main issue in this country – you can see, again, the gross public debt as a percentage of GDP is only 3 percent in the case of Chile, the lowest of the sample that you have in that graph.

But even more, if I tried to measure the net public debt – that is, if I discount to the gross public debt the amount that Chile has as external savings, in the savings account, the net figure is negative. So Chile is a net creditor. So having said that, we don’t have any problems. And within a context that most of the countries, either the U.S. or in Europe – that is the main challenge they are going to face – Chile is out of this problem already.

Of course, Chile will not be immune to what happens to the international economy. But certainly, we will be able to adjust and to follow our own policies without the restriction that is pressing when you have this kind of situation. And more than words, facts: You consider the access to financial markets. These are August figures. You can see the CDS, five years in terms of basis points. Chile is close to 100 basis points, much less than many other countries that traditionally have received better conditions than Chile. So that makes a difference, again.

And if I had to tell you, why? Why invest in Chile? Why do business with Chile, beyond the traditional trade among our countries? First of all, 10 reasons to invest in Chile. I will not go through each of them, but probably you have heard about that: a very dynamic economy; it’s a highly competitive economy, globally integrated and so on. I will only focus on some of them.

High competitiveness: The last report produced by the World Economic Forum places Chile as number 31. You can see the list. In terms of Latin America, it’s number one. That is important. If you go to openness of the economy, we have free trade agreements with almost 60 countries which amount to more than 60 percent of the population of the world.

That is important, so if you go to Chile, you can use that as a hub, and you will avoid paying tariffs in the other countries because of the free trade agreements. The general tariff rate in Chile is 6 percent, but because of the free trade agreements, the real average tariff that has been paid is less than 2 percent. So it is almost nonexistent, the barrier to trade.

In terms of transparency, there is an index on perceived corruption. So that is what people say about Chile – it’s not internally provided. It’s Transparency International. We are number 21. As you can see, we are one notch above the U.S. and very close to other important economies in the West. And that makes sense, and that makes a difference. In terms of the Business Environment Index, you can see there where we are, what are our neighbors. And in all the cases, you can see that the common feature is that we are number one in Latin America.

Now, as Invest Chile, which is the area that Corfo has to promote foreign investment, what do we have? We want to support – and when you see that picture, it’s not a random picture. There is a – you can see technology behind that. You can see something different, because we want to innovate. And what are we doing?

We want to attract foreign investment. We want to open the door for all the kinds of new projects that you may have, bring in new technology, and we will have the support through Invest Chile, which is the branch of Corfo in charge of this. We provide qualified services which facilitate what is needed. And what is very important is that precisely this week – we selected this week to open a new office in New York.

We work through the network of ProChile all over the world, but also we have in some specific countries our own representatives, where there is more interest and more possibilities for the investment. So we are just opening that office in New York.

When you talk about Chile, you may say, well, Chile has copper, has forestry or salmon, even wine. That is true. We have many advantages in that. But even more than that, if we want to be an innovative economy, if we want to be number one, if we want to be the regional hub, we can offer opportunities in areas as different as the ones that you can see there.

We want to strengthen the quality of the supplies of the mining industry, for instance. The big mining companies are in Chile. But do we have local providers, local suppliers, world-class, the same as we have world-class companies exporting copper? Maybe not, so we are working on that and there is room for opportunity there.

For industry, agribusiness, Chile has a tremendous potential for that – because of the climate, because of different conditions, because we are in the contrary season compared to the Northern Hemisphere. So that makes sense. So it is also an area of many opportunities. Biotechnology, manufacturing and assembly, and even nonconventional renewable energies – that is also very important.

And last but not least, offshoring. Why do I mention offshoring? If we want to be a hub to the Americas, offshoring is to export services, and export those services using the IT network. You know, in two words, transmitting data through the Internet, you can export services. And offshoring is very important.

Let me tell you that – if I ask any of you, do you know Chilean wine, the answer will be yes. And Chilean exports of wine are more or less 1.5 billion. Let me tell you that Chilean exports in offshoring were, last year, 1 billion. So in very few years, offshoring exports will be more important than wine exports. We think we can do that. We have the capabilities.

Evalueserve is an example. I don’t know if you’re aware – I wasn’t before coming to this position – that is a company formed by people from India, and they receive many investment – top investment banks outsource the production of their research to different parts of the world. Well, this company produces the research in Chile, in Valparaiso, not even in the capital of the country. They are doing that. That is offshoring; that is innovation. That is something different.

50 percent of our offshoring exports go to Latin America, 21 percent to the U.S. We have an advantage with the U.S. compared to other countries in the region. We have the same time zone as New York, for instance – more or less, with a difference of one hour. That is important. India is on the other side. So for some kinds of services, it is important to be with the same time zone.

At the same time, we think that many more companies could go there – not only because the cost of labor is cheaper. It could be the case in some situations, but we think that there is some value added, that can be added. Today, there are a lot of companies that are choosing – in the banking sector, in the financial sector in general, in engineering, in mining, even in TV – they are choosing Chile as a location to, from there, export to the rest of the world.

And why did I choose this slide? Because on the 14th-17th of November there will be a seminar in Chile about offshoring. Of course, all of you are invited. Why is this important? Because I can come here and address an audience like yours and explain why I think that Chile is good, but it’s not the same as you guys going there and you seeing with your own eyes what is going on.

I mentioned in the previous slide, mining, agribusiness. In all those cases, we have been organizing seminars and we bring people to the country. Well, in November, we will have the same with offshoring. So there is a very good possibility of doing new business there, so if you are interested, please contact people from Corfo here. Because that is the best way that we can promote the country and give you an opportunity.

And after all – a few words – why invest in Chile? That picture was taken last year, the very same day when Chile was celebrating 200 years as an independent nation. In our small square, it was President Sebastian Pinera and the four former presidents that are alive, all at the same time. We were raising that big flag, the flag of unity. You can see the smoke coming out of the planes. That is a terrific message. Not every country in the region can show a picture like this, with that sense of unity.

Of course, there are some differences. But after all, what makes us different? That Chile is always committed, every time there is a problem, we will always be committed solutions. When we had problems with the earthquake, we worked all together and we solved the problem. When we had the problems with the miners, the whole country was united, working on that. And we did it.

The next step is to be a developed economy, a country without poverty. We are working on that. We can do that. Of course, we need foreign investment. You are, all of you, welcome to that. We can provide some support for that. And I’m sure you will be happy after doing that: The quality of life is good in Chile. All the indicators that I showed to you also show a good prospective. And the most important thing is that phrase, “Chile: always committed.” Thank you very much. (Applause.)

MS.: Please rise and welcome President Sebastian Pinera Echenique. (Applause.)

SUSAN SEGAL: Please be seated.

Good afternoon, and welcome to the Council of the Americas and the Americas Society. We are so pleased and honored this afternoon to welcome back to the Americas Society the president of Chile, His Excellency Sebastian Pinera.

Before we begin, I’d also like to welcome Arturo Fermandois, Chilean ambassador to the United States; Octavio Errazuriz, permanent representative of Chile to the United States; Pablo Zalaquett, mayor of Santiago; Enrique Iglesias, secretary-general of Ibo-Americana; Carlos Honorato, deputy director of ProChile; Alejandro Cerda, trade commissioner of ProChile, and of course, all the other members of the Chilean delegation, and our members and special guests.

I also want to thank our wonderful partner for this afternoon’s presentation, ProChile. Thank you so much. You’re a wonderful partner, not just today but throughout the year.

Under the leadership of President Pinera, Chile has steadily navigated through natural disaster, domestic challenges and the world financial crisis. As we all know, President Pinera was elected in the aftermath of the world’s fifth – I learned today, now sixth, since Japan – most powerful earthquake. But the president worked quickly and courageously to rebuild his nation, and in spite of $30 billion in damages, in 2010 GDP expanded 5.5 percent and has expanded 8 percent in the first half of 2011. And the reconstruction has been – is not only on schedule, but ahead of schedule.

Shortly into President Pinera’s term, the world watched as 33 miners remained trapped underground. But the president rallied his countrymen, and in a dramatic rescue of – rescued each and every miner without any loss of life. And I remember, President Pinera, when you were here last year, you showed us the letter from the miners and said that they would be out by Thanksgiving. And the world watched attentively, all night and all day, as each miner came out of the mine. So again, congratulations.

Now, in the face of global economic crisis, President Pinera has overseen a markedly stable, buoyant and resilient economy. As we all know, Chile’s sovereign rating of A-plus, with a positive outlook, has been and continues to be the highest in South America. Maybe you can give my country a few lessons.

Since taking office, he has created over half a million jobs, and his prudent fiscal and monetary policies continue to make Chile an attractive investment destination. So again, we are very pleased to have you with us today. Mr. President, we look forward to your comments and your vision for your country. Thank you very much. (Applause.)

PRESIDENT SEBASTIAN PINERA: Thank you very much, Susan, for your words, your kind words. Thank you for your attendance. I am sure that Hernan Cheyre has given you a thousand reasons of why you should invest in Chile. Let me talk about something different. Chile was the poorest Spanish colony in Latin America, and now it’s the country with the highest per capita income in Latin America, $15,000.

But that’s not enough. We have set to ourselves very ambitious, but at the same time very feasible targets. We want to become the first – hopefully not the only one – Latin American country to be able, before this decade, to defeat poverty, to overcome underdevelopment. That’s the mission that we have set to ourselves.

As Susan was telling you, last year was a year that we will never forget. Ten days before we took office, the fifth-worst and most devastating earthquake in the history of mankind hit our country. And it was followed by a large tsunami that really had a very devastating effect, not only in terms of lives – which was the most regrettable loss – but also in terms of damage. And we lost $30 billion in terms of wealth, in a few seconds. That represents 17 percent of our GNP.

Just to put it in perspective, the Katrina disaster represented less than one half of 1 percent of U.S. GNP. And therefore, we had to make a decision. Because we were about to take power and we had a very ambitious program, but we had to act to that mission – the objective of reconstructing our country. Therefore, the task and the mission got much more ambitious and much more tough.

Hopefully, well, thanks to God, we have been able to manage with both challenges. Reconstruction is well on its way. We have already reconstructed 65 percent of what was destroyed by the earthquake. We still have to reconstruct the other 35 percent. That means, for instance, that we lost in a few seconds one out of three schools, one out of three hospitals, hundreds of bridges and airports and ports and water dams, and many other public properties.

But instead of losing our faith in the future, we did just the contrary. And we united to face those two big challenges: to reconstruct our country after the fifth worst and most devastating earthquake in the history of mankind, and at the same time, to accomplish our goal to become a developed country without poverty and with equality of opportunity before the end of the decade.

Up to now, we are doing fine. And I’m talking about real facts, not only opinions. As Susan mentioned, last year, despite the earthquake, Chile was able to grow at 5.5 percent. This year we have been growing in the first semester at 8.4 percent, and we estimate that by the end of the year, the growth rate will be 6.5 percent.

Why are we so concerned about growth and job creation? In terms of job creation, last year we were able to create half a million jobs, new jobs. The labor force in Chile is 7 million, so that represents 7 percent of the labor force. I think that here the labor force is 120, 150 million? So the equivalent would be to create 10 million jobs in one year. And that’s necessary, because in order to become a developed country without poverty, we need to do things much better than what we had done before.

So the growth rate is above 6 percent. We are creating jobs like never before. At the same time, we are increasing investment. Investment went up in 2010 by 20 percent. This year we expect a similar figure. At the same time, productivity, which was negative – and therefore, it was a drain to our growth effort – now is positive, and is a big support to our growth rate. And therefore, I think that the country’s in very good shape.

But as all mountain climbers now, we are still halfway towards development. We need to go from $15,000 to $24,000, which is, in purchasing power parity, roughly what is the average today of the OECD countries. And for that, we need to keep growing at 6 percent or more per year on average. And that’s our goal. And to create jobs to be able to absorb all those young boys and girls that will enter the labor force – and for that we need to increase investment.

Our investment rate used to be around 30 percent of GNP. It went down to 21 percent of GNP. And we also made a commitment to recover that investment rate and to bring it back to the 30 percent of GNP level. As I told you before, investment is growing much faster than the economy: 20 percent per year with an economy that is growing at 6 percent per year. Therefore we are creating the conditions for growth in the future.

But that’s not enough. We need to keep investing. We need to keep growing our investment effort by 15 to 20 percent per year. And there are a lot of opportunities, and Hernan Cheyre has told you about the conditions, legal conditions, stability conditions, and also all of the opportunities that you will be able to find in the Chilean economy.

A country that is fully committed to the state of law and with the rule of law, with the stability of rules, with international law, and we already have a very long track that really guarantees that that’s something that will prevail. That’s why in order to be able to accomplish our goal to become a developed country without poverty, and to create a more fair, just society, we need, of course, to permanently promote investment. But not only financial investment; it’s more than that we need.

We need investment, of course, but we need to add innovation and to build our capacity, access to new markets, new technologies. Because in order to become a developed country, we need to rely not only on the old pillars of development, which are basically stable democracy, an open, competitive market economy, and a transparent state, but we also need to build the new pillars that will really allow us to become a developed country.

And basically, that has to do with innovation, with entrepreneurs, with investment, with science and technology, and of course, with a substantial reform to increase the quality and access of our educational system. And therefore, if you come to Chile, you will be able to invest not only in the natural resource sector, which is a very promising one – particularly in the mining sector, in the forestry sector, in the fishing sector – but you can also invest in other areas that we need to develop in our economy, like the health sector, the educational sector, the public works sector, and many other opportunities.

Therefore, I can guarantee you that Chile is fully committed to the free, open market economy, fully committed with a real, stable democracy, fully committed with the rule of law and with respect to international law and to our own laws.

And therefore, I think, it’s providing the right framework for investors and innovators to go to Chile, and with the joint efforts of our own entrepreneurs, or investing by themselves, not only to take advantage of all these opportunities, but also to collaborate with our effort to transform Chile into a developed country before the end of this decade.

Therefore, I would like to welcome you to Chile. And I don’t want to repeat what Hernan Cheyre told you, but I can guarantee you that every word that he said is true, and he meant it. Thank you very much. (Applause.)

MS. SEGAL: The president has kindly agreed to take a few questions. And so if you could identify yourself, we have microphones if there’s a question. Right back there, please. Also, just so everybody knows, we are webcasting this event. And so this is live webcast as well, and we’re also recording it. It’ll go on our website.

Q: (Off mic) – you described the situation in Chile, which is particularly great compared to all the countries in the region. But from a political point of view, the people of Chile don’t seem so happy with the government. And in particular, your popularity is not that high, so that seems to generate an interesting parcel. And I wanted to know where you comment on that. Thank you.

MS. SEGAL: We can take a couple of questions. Yes, right there.

Q: Thank you to everybody for speaking. Mr. President, a pleasure to hear you speak. My question is more specific –

MS. SEGAL: Please identify yourself.

Q: My name is David Michael. I’m director of projects for International Funding Company. We’ve worked closely with Alejandro Cerda, ProChile, who’s been helpful. We do have alliances on the ground presently. Probably the greatest achievement we’ve had was inviting Alexis Sanchez here when he played for Cobreloa when he was 14. We were the first company to bring him here to play in a tournament.

My question is simple. We are on the ground and we do have some relationships with entrepreneurs on the ground, in the mining sector, and we’d like to participate in a greater way in the health care. And we have partners to do that. What do you suggest is the most appropriate way to participate and to announce the other organizations that we represent to Chile, and to increase our presence there?

MS. SEGAL: Do you want to answer two, and then –

PRESIDENT PINERA: What was the question?

MS. SEGAL: He is an international –

PRESIDENT PINERA: No, but what was the question.

MS. SEGAL: What’s your view on how to introduce – kind of, come to Chile and introduce themselves. I don’t think there was a good question in there, frankly. Beatriz Nofal, right here.

Q: My name is Beatriz Nofal and I was former secretary of investments in Argentina. President Pinera, I wanted to thank you for a wonderful presentation. I’m also from Mendoza, so I’m half Chilean. (Laughs.) I’m Argentine, but half Chilean.

President Pinera, given the emphasis your government in Chile is putting on innovation, entrepreneurship and becoming a regional hub, as was said in the previous presentation, of innovation and entrepreneurship – and also in propping up the investment rate to reach the 30 percent of GDP investment rate – don’t you think that particularly at this moment of international crisis, the agenda of innovation, entrepreneurship, investment, and cooperation in that agenda should be part of the UNASUR agenda?

The region has a history of cooperating in trade, but none of cooperating in terms of investment. In order to invest, the critical mass size is not provided by the domestic market of Chile or the domestic market of Argentina. The critical mass size, in order to attract the investment, is provided by the South American dimension. So given your leadership, I think this is an area for further cooperation in Mercosur.

This and low-carbon investment – the position of the region as a leader in low-carbon investment – what do you think about this? Thank you.

MS. SEGAL: Do you want to answer those three, and then we’ll take more? We’ll take these three and then we’ll take some more.

PRESIDENT PINERA: Let me take first, the first question. It’s true. People in Chile are becoming very – how do you say it, exigente? Very demanding of their political leaders. It’s true, our popularity, or the degree of support of the government right now is about 35 percent. But the degree of support of the opposition is half of that. (Laughter.)

It doesn’t mean that we are happy because of that, but it also means that people have realized that we have done a huge effort to be where we are. And they want to see the results. I agree with them. That’s why we’re not only pushing growth and employment.

We are also undertaking big reforms that should have been undertaken a long time ago, like the educational reform to improve quality of education, to guarantee free education for the needy ones, to increase the quality of the financing system or the rest, and to make sure that no young boy or woman will be left out of the university level because of lack of resources.

Those reforms should have been undertaken a long time ago, and I think that we lost a lot of time. And that’s why we’re trying to recover that lost time. But at the same time, we have to realize that you cannot solve all of the problems in one second.

For instance, what we’re doing now is not only trying to push the growth capacity of the economy, trying to push investment, productivity, innovation, but also, we are really attacking the poverty problem that we face with a very new attitude. And we set a very ambitious goal – to get rid, or to defeat extreme poverty before the end of our government. That means before the end – before March 2014.

And we are doing that by creating what we call the ethical family income, which is a kind of joint venture between the poorest families in the country and the government, by which we say, let’s make a strategic alliance. If you want to help yourself, we want to help you. And therefore it’s not only transfers and conditional transfers, but it’s a real strategic alliance. If they comply with their commitments to send their kids to school, to improve their grades, to have their health control updated, to look and find jobs, they will be getting more incentives from the public sector.

And therefore, I agree with you. Of course we would like to have more support. We had very high support a few months ago. That’s life, that’s politics. But right now, they are going up very rapidly because people are seeing the results of what we have been doing. For us it would be extremely simple to do the easiest thing. We have $20 billion, which represents 8 percent of our GNP, in savings abroad. We could use those savings to say yes to each and every demand of the people. But that wouldn’t be a wise solution.

And therefore, it’s true. There’s a kind of contradiction between what we call the thermic (ph) sensation, which are the polls, and what the temperature – the temperature that is being shown by the thermometers. But sooner or later, sooner or later – and I think that it will come rather soon, and it’s already happening – people are realizing that we are, as a country, doing a very good job.

We are growing in the middle of a world that is stagnating. We are creating jobs like never before. We are undertaking very large and very profound reforms, especially in the educational sector and the health sector, and fighting poverty with a new attitude. And therefore, I realize that people tend to get confused sometimes. We are halfway to development. And we cannot pretend that we are already a rich and developed country.

We have to keep pushing and working hard in order to be able to satisfy all the demands that have a right – have appeared in Chilean society. For instance, students are demanding free education for all. That is impossible. It would cost us $7 billion. We don’t have that money now. But of course, we are fully committed to guarantee equality of education to everybody, and free education for those who need it.

But we don’t think it would be a good idea, for instance, to use tax receipts paid by all Chileans, including the poorest, to finance the education of the richest. And therefore, that’s the question that we are facing. It doesn’t mean that we don’t care about that. But we care much more about the temperature that is shown by the thermometers than the thermic sensation that, of course, we hope will change.

With respect to how to invest in Chile, or how to announce your investment in Chile, it’s very simple. Chile is a very open country. We have very stable rules. We have a foreign investment committee where you can raise your foreign investment, if you want. If you do, you will have a lot of guarantees. For instance, you can choose between a fixed and guaranteed tax system, or to go with whatever the tax system, the tax rates are for the rest of the Chilean companies.

And there are many other guarantees that you can achieve by signing a contract with the Chilean state through the foreign investment committee. And therefore, it’s a simple country. You don’t need to pay bribes. You don’t need to be especially sympathetic to anybody. You just need to have a good project and a strong commitment to invest in Chile.

And with respect to innovation and entrepreneurship in the context of Latin America, I fully agree with you. Most of the Latin American countries are celebrating or have already celebrated their first 200 years of independence. We have had it all: a huge continent, vast territories full of national resources. We have been – we have not had the kinds of problems or wars that Europe had to face during the last century, or the racial or ethnic crisis, or religious problems that other countries are facing still now.

But despite all those big advantages, we have not been able, as a continent, Latin America, to really take advantage of all of our opportunities. But Latin America is learning and is awakening. And you see that it’s a continent that is growing very rapidly. But we need to demand much more.

I was telling you before about the new pillars that we have to build in order to really be able to become a developed continent. Among them is entrepreneurship, innovation, creativity, which is good for the countries. In many countries they think that’s not good for their countries. It’s just the opposite. We need more entrepreneurs, not less entrepreneurs. We need more innovation, not less innovation.

And those are the proposals that we are making within UNASUR in order to take advantage of our best experiences and practices, and learn from each other. And I hope that will be something that will produce fruitful results. And that’s something that we are discussing at every summit of UNASUR, and we’re already taking very strong steps in order to be able to really get the best out of Latin America. Because we haven’t done that up to now.

MS. SEGAL: Thank you. Yes, Angela?

Q: Good afternoon. Angela Camacho. I work for Microsoft Latin America. President Pinera, thank you for sharing your afternoon with us and your very open and sincere answers to the former questions. We operate in Chile and we celebrate the seriousness with which businesses are treated in your country.

We are very much aware of the emphasis that your government is placing on rule of law, which is a key for investment. You mentioned innovation. And attached to innovation comes the respect for intellectual property rights. We are pretty much aware of what your government is, but we would like to understand, what else can we do to join forces in terms of improving the way intellectual property rights are treated in the country?

MS. SEGAL: Why don’t we take a question right here.

Q: Good afternoon, President Pinera. Thank you for a great presentation. I’m Felipe Diaz with Sumitomo Mitsui Banking Corporation. We usually have been very active on raising financing for mining projects in Chile. And everybody is aware of the good environment for the mining sector, and therefore, we see a lot of large foreign corporations coming to invest and develop – continue developing projects, mining projects in Chile.

On many of my trips to Chile, I’ve been having discussions with other midsized mining companies. Most of them, of course, are Chilean owners of an interesting deposit. And I see that they are interested in expanding the operations of their own existing mine. However, it seems that there could be still a lack of access to capital to get those projects off the ground and develop them. So I wanted to just ask, where is the government at this point regarding supporting the midsized miner in Chile that could have the chance to progress and grow and become an important player in the industry?

MS. SEGAL: Do you want one more question? Susan, you’re right there. Susan Silverman, right here.

Q: Good afternoon, President Pinera. Thank you for being with us this afternoon. I want to piggyback on a few other questions.

MS. SEGAL: If you could just identify yourself.

Q: Oh, right. I’m sorry. I’m from Pfizer Pharmaceuticals, and we’re operating in Chile for over 50 years, and all throughout Latin America. We have a very good operation in Chile.
We’re been there; we’re all through the country. And one of the things we’re doing, I think, to support your goal of both innovation and reducing poverty is some interesting programs in some of the poorer areas around Santiago. The program is called – (in Spanish) – and we’re trying to – we’re just at the end of the pilot phase and we’d be interested in expanding it.

And I’d like to understand a little bit more your ideas on how you’re going to link the reduction in poverty and the improvement in health care. And then perhaps we’ll have the chance to sit down with Minister – (inaudible) – and talk a little bit more about how we can support those goals that you have. Thank you.

MS. SEGAL: Mr. President?

PRESDIENT PINERA: Thank you very much. First of all, with respect to protection of intellectual rights or intellectual property, it’s just like any other property and so it has to be protected. And we have done huge efforts to improve the protection that we give to intellectual property in our country. Not only because we have to fulfill with the agreements that we have signed, particularly the free trade agreement with the U.S., but also because it’s good for the country because if we don’t protect those intellectual properties, what will happen is that nobody will invest in those goods. And we need those goods because those are a very important part of innovation and creativity. And I was talking about that before.

But we have come a long way during the last few months. For instance, we have accomplished huge progress in terms of really fulfilling and honoring our international treaties. For instance, the trademark law treaty was finally approved by congress a few months ago. The same thing happened with the institution of program-carrying signals transmitted by TV networks. The same thing with – and probably the most important one – was the huge overhaul that we undertook to the Chilean copyright act.

And therefore we are fully aware that intellectual property has to be protected because if we want to be part of the world and we want to have free trade agreement with the most developed countries in the world, we have to honor international law and especially honor our own commitment. And therefore I recognize that we – maybe we should have done it faster before. But we are doing now our best efforts in order to comply with our commitment, with our treaties and also what has to be done, which is to protect intellectual property, because it’s a lot of property and probably the most important property because it’s the one we need the most in order to achieve the goals that I have set forward before.

With respect to a mining program financing and medium-sized firms, we have already identified mining projects which would require an investment of $70 billion between the next six or seven years. One-third of that will be undertaken by the CODELCO, which is a public corporate company. The other two-thirds will have to be undertaken by private companies. And many of them are medium-sized companies. And so we are working very hard in opening new sources of financing for those medium- and small-sized mining companies.

We are working at improving our capital markets so they can access our capital markets. We are working with Corfo to create funds and financing lines so they can undertake their investment projects, and also companies like – (inaudible) – can play a very important role in that because we are fully aware that Chile is not only big mining companies, we have a very vast and very – and very efficient small- and medium-sized mining sector that has revived, particularly because of the higher prices of copper and gold and silver and many other minerals.

But we also have to take into account that we will have to start exploiting other resources like lithium, sodium and many others where Chile has vast reserves. And therefore, all – everything that we can do in order to facilitate, for medium- and small-sized mining companies, their access to equity and loans is part of our priority.

And finally with respect to poverty and health, we – intensive poverty – we have set out a goal that – we have in Chile two kind of poverty: extreme poverty and poverty. And our goal is to defeat extreme poverty within our – (inaudible) – and to create the conditions to be able to defeat poverty before the end of the decade. Our poverty level is about 15 percent; our extreme poverty level is about 3 percent. In one case is 500,000 people; the other case is about 2-point – 2-point – 2 million people, something like that.

And therefore we have created this Ethical Family Income which means that we take into account what is the revenues and incomes of the family and we compare that with the poverty line. And we say, OK, we will get you to the poverty line but not just by transferring unconditionally public resources but by making a strategic alliance.

If you do certain things which are absolutely needed – that has to do with health, education, training, labor – we will guarantee that in the meantime while those investment in education and health and labor provides its results, the government will transfer the necessary amounts in order to facilitate to those family their access to the poverty line and therefore to get rid of (it ?).

And health is a very important aspect of that. And this year we will have to undertake a very huge reform in the health sector which has to do with the private health sector. And if you want to know more about that I can give you a webpage where we explain in details what our plans for the big and profound health reform that we will undertake during this year. Thank you very much.

MR. SEGAL: Thank you. (Applause.)

I – before – I just want to thank President Pinera. First I want to thank Hernan Cheyre, our – from Corfo – President of Corfo for his wonderful presentation. We watched it from the press room. I want to thank President Pinera for his outstanding presentation. He is both an entrepreneur, an innovator, a statesman and a role model for someone who has then gone on to be president. So thank you for spending your afternoon with us and answering – making such a great presentation and answering all the question. Thank you very much. (Applause.)

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