business Chile The voice of the Chilean-American chamber of commerce N°292, DECEMber 2013
USA: Open for Business
Election 2013 Trade Testimonial Special Report The Green Ballot Enseña Chile Generation Y in Chile av_medioamb2013_AMCHAM.pdf 5 18-07-13 12:03
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TRADE TESTIMONIAL 6 46 Life in the Slow Lane usa: Teach for Chile Rock On open for business Non-profit organization Enseña Chile selects and trains Chilean Like his idol Bruce ElEction 2013 tradE tEstimonial spEcial rEport The Green ballot enseña Chile Generation Y in Chile university graduates to teach for Springsteen, Santiago two years in some of the country’s Eneldo plans to keep on 14 poorest schools. rocking until the end. The United States: Open for Business Election 2013 Spotlight President Obama has 8 28 launched a new The Green Ballot Good Corporate Citizens A reform in Chile that allows program to support AmCham’s annual Good Regional Councilors (COREs) to be foreign investors from Corporate Citizenship Awards directly elected is meant to promote Chile and other help to promote successful decentralization, but the results are Corporate Social Responsibility countries, but are inconclusive. Chilean companies initiatives in Chile. taking advantage? 14 Cover Story 40 AmCham Special Special Report The United States: Open for Facing Chile’s Energy Challenges 22 © 2013 AmCham Chile Business Reproduction in whole or in part is The Chile-Massachusetts Energy Generation Y in Chile: strictly forbidden without permission The US government’s SelectUSA Forum, which was held in Boston from the publisher. Opinions expressed in What do Millennials initiative offers personalized recently, aimed to address the bUSiness CHILE are those of the authors assistance and information for and do not necessarily reflect those of challenges of the energy industry Want? AmCham or bUSiness CHILE. We accept no Chilean companies looking to in Chile. Millennials, aged responsibility for the accuracy of the articles invest in the US. and any unforeseen errors. bUSiness CHILE between 20 and 35, is published monthly, 10 months a year tend to be adaptable and mailed free of charge to AmCham Special Report Interview members. Letters are welcome. They should 22 44 and optimistic but they Generation Y in Chile: What do be accompanied by the author's name Promoting Chile Abroad are also technology- and daytime telephone and sent to Millennials Want? Roberto Walker, president of [email protected] For reasons of dependent and Experts say that figuring out what Latin America for Principal space limitation, AmCham reserves the impatient, which can right to edit letters published. Millennials want, such as the International, talks to bUSiness Advertising inquiries should be addressed opportunity to make a difference, CHILE about Chile Day and the be a challenge for to AmCham's Sales Department: Paulina is key to keeping them motivated Dellafiori: E-mail: cristina.ordenes@ post-election economic outlook. traditional businesses. amchamchile.cl; Phone:2909741. Fax 2120515 in the workplace. Av. Presidente Kennedy 5735, Torre Poniente, Of.201, Las Condes, Santiago de EDITORIAL BOARD Chile; E-mail: [email protected]; Co-Chair, Michael Combes, Marco Chilena; Co-Chair, Karen Poniachik, British American Tobacco Chile; Vice- www.amchamchile.cl; www.businesschile.cl Chair, Manuel José Vial, Grupo Vial Abogados; Vice-Chair, Ruth Bradley, Freelance Journalist, General Editor, Julian Dowling, AmCham Chile; Assistant Editor, Mariana Ossa, AmCham Chile Production K & D Comunicaciones Ltda. Olga Kliwadenko, MEMBERS General Manager, 11 de Septiembre 1945 - Of. 516, Providencia. Phone: 376 9877, Kathleen Barclay, President AmCham Chile, Roberto Matus, General Manager AmCham Chile, Gonzalo Cell: (09) 6601-5505; Iglesias, IC Packaging; Ari Bermann, 3M Chile; Pelayo Bezanilla, Coca-Cola de Chile; John Byrne, Boyden e-mail: [email protected] Consultores Chile; Paulina Dellafiori, AmCham Chile; John P. Dill, Project Management; Francisco Garcés, www.kyd.cl Banco de Chile; Ricardo Inostroza, AES Gener; Olga Kliwadenko, K&D Comunicaciones; Gideon Long, BBC/ The Economist; Vincent McCord, Asesorías e Inversiones CarCon; James Newbold, Tanager Investment; The articles in this magazine are also available Roberto Ossandón, Ossandón Abogados in Spanish at www.businesschile.cl www.businesschile.cl business Chile December 2013 3 AmCham Global Sponsors 2013
4 December 2013 business Chile www.businesschile.cl Editorial
Selecting the USA
The door to the United States has been They discussed why the US economy could open to Chilean companies since the signing be attractive to investors, including its size, of the Free Trade Agreement between the infrastructure, number of trade agreements, two countries a decade ago. In addition to and a trained and educated workforce. The promoting trade, this landmark agreement straightforward legal system, political stability, and signed in 2003 facilitates investment between declining cost of energy in the US completed the the two countries. But, until recently, most of picture. All of the above, explained the speakers, the investment has flowed one way – from the make for a highly productive work force. United States into Chile. Increasingly, however, The message was loud and clear: “The US is Chilean companies are finding opportunities to open for business”. invest in the United States. Historically, the promotion of foreign investment Chilean companies looking to expand in the United States has been left to individual internationally have traditionally invested in states. Since there are 50 of them, each with Latin American countries where the culture and unique characteristics, rules and incentives, this markets are familiar. But the United States offers can be intimidating for investors. But now, as our an opportunity to invest in a huge and diverse Cover Story explains, the federal government is market. Not only has the global financial crisis of establishing a single window in US embassies that 2008 generated potentially good deals, but faced will be charged with handling enquiries relating to with rising competition from other countries the foreign investment. Crucially, especially for small US government is also working harder than ever Chilean companies, it gives investors a centralized to attract foreign investment. point of contact to obtain advice and information. This month’s Cover Story reports on President As part of its mission, AmCham has always Obama’s SelectUSA initiative, which, as the name supported US companies looking to set up implies, aims to convince foreign investors to operations in Chile. A challenge for the Chamber “select” the United States. In October, the first in the future is to work with the US Embassy ever SelectUSA Investment Summit was held in to support Chilean companies interested in Washington, DC, with businesspeople from around setting up operations in the United States. Doing the globe. AmCham Chile President Kathleen business there is not easy – US consumers can Barclay and General Manager Roberto Matus also be demanding – but with so much help available, attended. It was hosted by President Obama and there is no excuse not to explore the opportunities. included speeches by senior officials of the US Finally, bUSiness Chile and the Amcham staff government, as well as by executives from the would like to take this opportunity to wish all our private sector including companies such as Dow readers, and all AmCham members, a happy and Chemical, Walmart, and Bloomberg. prosperous New Year.
BOARD OF DIRECTORS EXECUTIVE COMMITTEE
President Directors Advisory Council Kathleen C. Barclay Asesorías KCB Ltda. Pamela Camus, American Airlines Alfredo Ergas, InBest Chile Vice President: Felipe Cerón, AES Gener Arturo Fermandois, Carolina Valdivieso, Fermandois Evans y Cía. Kimberly Clark Chile Fernando Fischmann, Crystal Lagoons Gonzalo Iglesias, IC Packaging Secretary of the Board Michael Grasty, Pablo Achurra, Aramark Grasty, Quintana, Majlis y Cía. Rodrigo Álvarez, Principal Financial Treasurer Sandra Miró, DHL Chile Sandra Guazotti, Oracle Chile Karen Poniachik, Past President British American Tobacco Chile Javier Irarrázaval, AmCham Mision Statement The Walt Disney Company Chile Ellen Lenny-Pessagno (Ex-Officio) “Promote free trade and business between Chile and the United States" www.businesschile.cl business Chile December 2013 5 TRADE TESTIMONIAL Teach for Chile The non-profit organization Enseña Chile, which is part of the Teach for All global network, aims to be a catalyst for change in Chile’s education system.
By Julian Dowling
omás Recart never program to improve attendance at All network launched by TFA and expected to be working schools in Puente Alto, one of the Teach First, which now includes in the education field. poorest areas of Santiago. “You 30 countries. In August that year When he was studying could smell the no hope,” he says. Enseña Chile started receiving T engineering at the Catholic “I started to feel a big sense of applications. University of Chile more urgency in my stomach.” “In two months we had 326 than a decade ago he wanted to He discovered that relatively applicants and we selected learn by doing. But today he is minor changes could make a big 40 of which 29 accepted,” he Executive Director of Enseña Chile, difference in struggling schools said. Since then the number of a Santiago-based organization like those in Puente Alto. “My applicants has risen and this year that recruits graduates from sense of possibility grew even Enseña Chile placed 136 teachers Chilean universities to teach larger, there are so many things to in 69 schools in the Araucanía, for two years at schools in low- change but every single thing has Los Ríos, Valparaiso and Santiago income neighborhoods. a solution.” Metropolitan Regions. Over 20,000 Recart caught the education A few years later, further students have benefitted. “virus” as he calls it in 2002. motivated by Chile’s student-led Enseña Chile gets 20% of A 24-year old graduate student, Penguin Revolution in 2006, he its budget from the Ministry of he was working on a software enrolled at the Harvard Kennedy Education and the rest comes School of Government. There he from individual and corporate met Wendy Kopp, the founder donations, including 70% from of Teach For America (TFA), five strategic partners – Bci, Entel, an organization that places US Anglo American, Empresas Copec graduates in low-income schools. and the non-profit education Her vision immediately NGO Fundación Mustakis. These impressed him. “She said when partners also help with strategy the system is broken don’t try and give management advice, to solve the problem yourself, said Recart. concentrate on building a bridge A third of the budget is spent between the most talented people on recruitment, mainly in the top in your country and the biggest six universities in the country. problem in your country.” Engineering departments are He found out from former especially targeted, he said, classmates that he wasn’t the only because the biggest lack in one interested in bringing Teach Chilean schools is in math, For America’s model to Chile and science and English. so they met in New York to start The rigorous selection process work on a proposal. includes essays followed by one- In 2008, Recart and his on-one interviews to weed out Tomás Recart, Executive Director of Enseña Chile colleagues founded Enseña Chile those who don’t make the cut. and joined the global Teach for Only one out of ten make it past
6 December 2013 business Chile www.businesschile.cl this stage. Tomás Rivadeneira is an alumnus from the 2010-2011 cohort. After studying engineering at the Catholic University he decided to apply because he wanted to work in something where he could “make a difference”, he said. He also wanted to know firsthand about Chile’s education system. “For me it was very valuable to share two years every day with students, many of them in a situation of vulnerability, to realize their problems and those of their teachers,” he said. Enseña Chile’s teachers receive one month of training before Enseña Chile alumni and staff at the eCh Seminar in 2012 stepping into the classroom and continue training on weekends not true,” he said. in poor areas of the country. during the program. “The training And the demand for teachers In the future Recart hopes to is good, but it is never enough is huge. Last year 35 schools learn from the other countries in for the reality that you face,” said that requested teachers didn’t get the Teach for All network, such Rivadeneira. them. Priority is given to schools as China and India, and make A criticism of Teach for America that have already participated the program more diversified. But has been the lack of training and that have students from low- he admits he has run into the compared to fulltime teachers. But income families, explained Recart. same problem Enseña Chile is Recart said that those selected in Many teachers catch the trying to solve – the best teacher Chile already have the skills to education bug. Recart says 75% candidates are from universities teach and they hone those skills of alumni continue to work fulltime where the students tend to come in the classroom. “We believe in education either teaching, as from privileged backgrounds. that good training has to include social entrepreneurs or in the As for the current debate about classroom experience.” government. Another 12% go education in Chile, Recart says The pay is not a big draw. on to graduate school, 5% work the focus is misplaced. Instead of Successful candidates pocket in companies and the rest start discussing how to finance access, 400,000 pesos (some US$800) a businesses or work in NGOs not politicians should be talking about month, which is about a third of related to education. quality, he said. what they could earn starting out “We don’t want them all to be How schools are financed, in professions like engineering. teachers, we need people from all whether with private or public But money isn’t everything. walks of life,” he said. resources, does not necessarily “They understand this is It is early days still, but Recart determine the quality of teaching something they won’t get says Enseña Chile should be in their classrooms. “Private or doing Excel spreadsheets and judged by the impact of its alumni. public, there is no silver bullet Powerpoints,” said Recart. Rivadeneira, for example, now here,” he said. But putting bright Enseña Chile also gives its works in finance at Larraín Vial young minds in the classroom is teachers feedback and measures but is involved in the Community, a start. bUSiness chile their students’ performance, which Responsibility, Teamwork and is something education faculties Excellence initiative (CREE by its in Chile do not do. “Some people Spanish initials) that aims to create a say anyone can teach but that’s network of “Schools of Excellence” Julian Dowling is Editor of Business CHILE
www.businesschile.cl business Chile December 2013 7 Election 2013 The Green Ballot A new system that allows voters to directly elect Regional Councilors (COREs) in Chile is meant to decentralize decisions regarding public spending, but after the first trial run in November critics say the reform does not go far enough.
By Kalynne Dakin
n November 17, the idea was to represent the Chilean electorate better than ever. The polls got O more colorful, debuting a new green ballot alongside the standard white, blue and beige hues for the presidential and congressional tickets. The ballot allowed voters to choose, for the first time ever, their local representatives known as Sebastián Piñera backed a non- COREs and highly populated Consejeros Regionales (COREs), partisan push to modify the system provinces can have more than two or Regional Councilors, who are of representation amid demands representatives. Chile’s smallest responsible for, among other for greater regional investment. In regions, by contrast, will rely on things, deciding how tax revenues June,President Piñera made good 14 councilors to represent up to are spent in their communities. on a campaign promise by signing 400,000 inhabitants. “This is the most important a law that empowers citizens to Councilors are elected for a four- change regarding decentralization elect the COREs directly. The trial year term and can be reelected. Their in 20 years,” said Miguel Flores, the run for the new system was the tasks include deciding how to spend Interior Ministry’s Undersecretary November election. money received from the National for Regional Development. “What decentralization seeks to Fund for Regional Development Following Chile’s return to do is ensure that decisions are (FNDR), monitoring the actions of democracy in 1990, regional made as close to the source the governor, and approving regional councils were created to of the issue as possible,” said development strategies. decentralize governance. Flores. These are chaired by a regional Based on a new method of Regional spending governor, or Intendente, who is divvying electoral districts, 278 appointed by the President. The councilors will represent Chile’s 15 In 2014, the regional councils councilors, who until this year regions. Each region is comprised will manage about US$2.2 billion were appointed by municipal of up to eight provinces, each in funding, up from US$1.6 billion councilors, or Concejales, are of which is guaranteed at least in 2012, an increase that Flores responsible for approving projects two representatives. The size of lauds as historic. But critics such as sewage systems, street a region’s population determines complain the amount is a measly lighting, road repairs and cultural how many councilors it will slice of total national spending. activities. Yet few Chileans know elect. Regions with over 4 million The portion of annual public who they are. inhabitants, such as the Santiago investment for which the regions But that is changing. The Metropolitan Region, have larger were responsible averaged just government of President regional councils made up of 34 13% in the last decade. But the
8 December 2013 business Chile www.businesschile.cl The Green Ballot
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Avenida del Cóndor Nº 760, Huechuraba, Santiago. Teléfonos: (56-2) 2385 1000 - Fax: (56-2) 2385 1001 www.aramark.cl Election 2013 level of investment overseen by the regions has been on the rise since President Piñera took office in the aftermath of the 2010 earthquake, which required considerable funds for reconstruction. Even so, the central government has reserved the right to make the better portion of public spending decisions. “There are people who say that even if the government offers more resources to the regions, they don’t have the professionals nor adequate management “We are increasing the “Citizens demand capacity to do good projects and importance of regional further development Campamentos spend in an efficient manner,” councilors and the of their regions but Mineros said Jorge Rodríguez, a public governor as authorities they don’t necessarily policy analyst at Santiago think- tank CIEPLAN. capable of resolving a understand how to But he said that without more larger quantity of problems achieve it.” money and responsibility they than they do today.” will not be able to develop that capacity. “It’s a vicious circle, and Miguel Flores, Jorge Rodríguez, both aspects must be addressed Undersecretary for CIEPLAN at once,” said Rodríguez. Regional Development He does not interpret the recent increase in spending during the Chile, in particular, and these concerns are for constituents Expertos en Servicios Piñera government to a change in institutions were very centralist.” who lack access to clean water heart. “Decentralization happens If Latin American development and basic education. Alimentación y Gestión Integral by sharing power,” he said. is characterized by urban growth, “The regional councils respond de Instalaciones “Basically, those who have the Chile can call itself traditional. to political parties and not to the Educación power don’t want to share.” Resources tend to concentrate in citizen,” Sandoval said. “Regional Rodríguez would like to see the Santiago, which is home to around development is a farce — it isn’t state raise the regional share to a third of the country’s population. bound to the interests of this 30% of the budget within the new National economic indicators region, but to other interests that councilors’ first term. suggest that Chileans are don’t serve us.” “As a country, we have the rather making globally competitive Residents in the region, which Salud sizable challenge to decentralize, wages, demolishing poverty, is known for its strong Mapuche and democratically electing making gains in education heritage, have taken to the streets the regional councilors is a step and keeping pace with many to demand greater sovereignty on forward,” he said. “But you have to standards of the Organization a regular basis. Industrias take a broad and integral approach.” for Economic Cooperation and “Since 1993, there has been a Development (OECD), which failure of understanding by the Spanish influence Chile joined in 2010. regional councils concerning [the However, many of these scores indigenous population’s] main Although Chile recently do not reflect the living standard territorial demands,” said Sandoval. celebrated 200 years of in regions beyond Santiago. For the Araucanía, decentralization Educación independence from Spain, Daniel Sandoval, who was could mean more funding for colonial influence has not entirely elected as a CORE representing cultural preservation. retreated from the continent. the Party for Democracy (PPD), “This is a very significant vote for “Chile is a centralized country, said the view from the Araucanía local and regional development, but culturally speaking,” said Flores. Region in southern Chile is unfortunately we see that there isn’t “Spanish institutions extended quite different. Some of the any effort to try to inform citizens,” Avenida del Cóndor Nº 760, Huechuraba, Santiago. throughout Latin America and former Senate adviser’s main said Sandoval. Teléfonos: (56-2) 2385 1000 - Fax: (56-2) 2385 1001 www.aramark.cl www.businesschile.cl business Chile December 2013 11 Election 2013
Future challenges
In the event, and despite having nearly 1,400 CORE candidates to choose from at a national level, preliminary election results showed that Chileans voted mainly along party lines. According to Chile’s Electoral Service (Servel), 17 of the councilors elected did not represent either of Chile’s two “Regional development “The election of COREs main political coalitions: the Alianza or Nueva Mayoría, which is a farce. It isn’t bound to will not directly address won 103 and 156 CORE seats, the interests of this region, the issue of economic respectively. They represent but to other interests that underdevelopment.” smaller coalitions such as Todos don’t serve us.” A La Moneda and Si Tú Quieres, Chile Cambia, led by former Daniel Sandoval, presidential candidates Marcel CORE-elect in the Patricio Navia, Claude and Marco Enríquez- New York University Araucanía Region Ominami, respectively. Unless Congress loosens its What’s a CORE? could be appointed. But it was grip on the regions, however, still the old party machine at Rodríguez is not convinced that The government’s campaign, work, said Navia. the CORE elections are such a with the slogan “Decentralization “For the most part, COREs “radical” leap toward greater starts with you”, employed famous have been party insiders, decentralization. faces to ensure that voters knew people who build a political “The question is, what about the change. But the green career within the party,” Navia new functions, resources, ballot attracted little attention said, adding that old standards responsibilities should [the before the election. allowed councilors to also hold COREs] have,” he said. “I don’t think most people know paid government positions. But at the very least, Chilean that the COREs exist,” said Patricio In the first respect there won’t democracy evidently matured this Navia, a Chilean professor of political be much change, he said. Like the year. The hope is that in the future science at New York University. “My presidential candidates, who had people will better understand the suspicion is that people don’t feel an uncompromised hold on the function of COREs and why it represented by them.” media spotlight this year, many is so important to monitor how New representation did not of the CORE hopefuls aligned they spend the region’s limited necessarily mean fresh faces. themselves with established resources, said Flores. Many of the candidates had held national parties. Santiago may be Chile’s government office in the past, and “The parties now control the economic pulse — pumping out the government estimated that nomination process and people nearly half the country’s annual 40% of candidates had previously will mostly vote for party affiliation GDP — but investment potential participated on a regional council. at the CORE level,” Navia said. spans from tip to tip of the diverse Until a decade ago, local In addition, the main regional landscape. mayors had an important say authorities, the Intendentes, will “Chile will never be a developed in the composition of regional still be appointed by the central country if it doesn’t increase its councils because of the way government, he added. level of decentralization,” said municipal councilors were Considering the dearth of Flores. bUSiness chile elected. But, in 2004, an electoral information ahead of Election Day, reform created a separate ballot other experts agreed that voters Kalynne Dakin is a freelance journalist formerly for councilors, and meant that might simply select the CORE based in Santiago and currently working in COREs with different loyalties candidate affiliated with their party. Washington, DC.
12 December 2013 business Chile www.businesschile.cl
COVER STORY
President Barack Obama at the SelectUSA 2013 Investment Summit
The United States: Open for Business The United States is making a concerted effort to attract foreign investment and for Chilean companies there has never been a better time to invest in the world’s biggest economy, but planning is key to success in this diverse and competitive market.
By Julian Dowling
merica is open for DC, in October. Speaking to more in the world to do business than business. That was than 1,200 executives gathered the United States of America,” he the message President from nearly 60 countries, including said. “We are open for business Obama hammered Chile, President Obama pitched and we’re looking forward to A home at the first-ever the opportunities and benefits of partnering with you.” SelectUSA Investment Summit investing in the United States. The United States has by far held for two days in Washington, “I believe there is no better place the largest stock of Foreign Direct
14 December 2013 business Chile www.businesschile.cl COVER STORY COVER STORY
US government regarding foreign investment, said Matus. One Chilean company that participated in SelectUSA was energy efficiency firm Romatech. “For us it was the opportunity of a lifetime, it was a complete success,” said Roxanna Orellana, International Sales Manager at the Santiago-based company. The company, which produces a power-metering device at its plant in Cerrillos near Santiago, is looking to open a plant in the US that will produce the device for the US market. “The Chilean market is small and we need to expand,” said Orellana. “Chile has 16 million people, the US has “The general panorama “We are dying to 300 million.” is growth in foreign take this next step But first it needs to decide investment by Chilean into the US market. which state. Forty-two states companies, but almost America is a great were represented at the SelectUSA meeting, each with all of it has been in country and this is a their own stand. Orellana visited Latin America.” dream come true.” the booths of California, Florida and New York among others. All of them offer different incentives, Roxanna Orellana, she said, but she was particularly Miguel Pérez, Romatech ECLAC impressed by Texas. “Every state works differently, you have to pick a state according to your needs,” she said. Investment (FDI) in the world, but Obama has called on US After comparing the incentives, its share of FDI inflow has fallen embassies around the world, she said Texas offers cheaper in the last few years as other including in Chile, to support living and labor costs than New countries, including China, have companies with information and York, and is also a “high tech become more competitive. At the counseling regarding investment state” with many of the country’s same time, the US economy is opportunities in the US. top universities. Another recovering slowly from the 2008 That is welcome news for advantage is that it is a “Latino” financial crisis and has narrowly Chilean companies that can state, she said. Although fluent in avoided a double dip recession. be intimidated by the size and English, she admitted she is more In this scenario, the government sophistication of the US market. comfortable doing business in a hopes foreign investment will “This is a very serious all- state where she can work with generate jobs and boost exports. out effort, it is not just another other Latinos. But investors need to be wooed. speech,” said Roberto Matus, Romatech’s first move will be SelectUSA is an initiative created AmCham Chile’s General Manager, to partner with a university in by the Obama administration who attended SelectUSA along Texas that will certify its metering in 2011 to promote the US as with AmCham President Kathleen device according to US norms, an investment destination. The Barclay. and convert it to the 110-volt program gives businesses a The high level of speakers at system from Chile’s 220-volt single point of contact in the the event, including US Secretary system. Then it can be patented, federal government to cut of State John Kerry, shows there produced and sold. “Produce a through red tape. In addition, is a “new way of thinking” in the product in America to sell to
16 December 2013 business Chile www.businesschile.cl America, that’s the idea,” she said.
The unchartered frontier
For Romatech, the ease of doing business and reliability of the US market are key factors in its decision to expand there. “We like things to work, that’s the American way,” said Orellana. But there are other more concrete advantages of doing business in the United States, including low energy costs, competitive labor costs and relatively high productivity, said Ellen Lenny-Passagno, Senior Commercial Officer at the US Embassy in Chile. “The US is the unchartered frontier for Chilean companies, they are underweighted in terms of their investment in the US,” she said. “Now is the perfect time for them to be looking at the US.” As a result of the Shale gas boom in the last decade, energy costs have fallen and the US now produces more than half of its energy supplies domestically. That is at least part of the reason foreign manufacturers like Siemens are increasingly exporting products from the US. “Many companies find it very cost effective,” said Lenny-Passagno. The US also offers respect for the rule of law and protection for intellectual property, she said. “We’ve seen a number of Chilean companies open offices in the US in order to take advantage of intellectual property protection.” One of these is Crystal Lagoons, which recently opened its global head office in Miami. “The decision is due chiefly to the extraordinary potential that the US market represents for our technology,” said Kevin Morgan, CEO of Crystal Lagoons USA. Crystal Lagoons recently announced its first project in the US – a real estate development in Florida called Tradition. After the 2008 financial crisis and bursting of the housing bubble, the US real estate industry is starting to pick up again, said Morgan. “Trust has begun to be restored and today the development of the real estate industry is regaining momentum,” he said.
Latin American advantage
Chilean investment in the US, which reached US$552 million in 2012 according to the COVER STORY
Economic Relations Department than to replicate their successful top target of Chilean investors (Direcon) of Chile’s Foreign Affairs business model in the US, said in the region, particularly in the Ministry, is a drop in the bucket Miguel Pérez, an economist at retail and banking sectors - and of overall FDI in the US, but it has the UN’s Economic Commission US$916 million in Brazil. been growing steadily since 2008. for Latin America and the Chilean investment in the US In addition to mining and real Caribbean (ECLAC). is expected to keep growing, estate, Chilean companies have Foreign direct investment by but this trend is relatively recent: seized opportunities in viticulture Chilean firms has increased in investment in Latin America and forestry: Concha y Toro the last decade as they have represented 85.5% of total acquired California winery Fetzer outgrown the relatively small Chilean FDI in the period 1990- in 2011 and Arauco bought a domestic market. Their financial 2012, while investment in North particleboard plant in North capacity, partly fuelled by private America was only 7.5%. Carolina last year. The latest to pension funds in Chile and strong A 2011 ECLAC snapshot of the party is Chilean bank Bci, FDI inflow, has also enabled more Chile’s 20 largest multinationals which earlier this year agreed companies to invest abroad. outside the financial sector shows to buy City National Bank of And, since FDI tends to be that they are concentrated in Florida from its Spanish owners countercyclical, recent global neighboring countries and in only for nearly US$900 million. That economic turmoil has created a few sectors. In fact, 63% of deal is expected to close in the investment opportunities. foreign assets were concentrated coming months. But most of the investment to in just two sectors: retail and In all these cases, companies date has gone to Chile’s neighbors. forestry. Transport had 10% and that already had operations in In 2012 Chilean companies food and beverages 7%. the US jumped at the opportunity invested a record US$8.55 billion Even though there has been to expand their presence in this abroad, according to Direcon, some expansion recently beyond market. But they have done so up from nearly US$5 billion in Latin America, the fact that most mainly as an extension of their 2009. Of this, companies spent investment to date has been international strategy rather US$5.32 billion in Colombia – the in Argentina, Peru, Brazil, and
increasingly Colombia, is a sign Diversification strategy linked to the macroeconomic that companies are seeking cycles of Latin America,” he said. markets similar to Chile’s, said Some Chilean firms, like those Other countries have adopted Pérez. mentioned above, have done this approach in the past. Spanish “They are looking for similar well within Latin America, but too companies, which invested markets to repeat the formula that much concentration in the region heavily in Latin America in the has been successful in Chile,” could spell disaster. A slowdown 1990s before starting to invest in he said. “This might be in Peru, in China, for example, could hurt the US about seven years ago, Argentina, Colombia and maybe Chilean investments not just have shown this strategy works, Mexico, but not in the US.” in Chile but also in other Latin said Lenny-Passagno. Although the US offers American countries. “I see a lot of similarities in advantages for Chilean “If and when the Chilean the way Spanish and Chilean companies, including a large economy decelerates, the multinationals have approached Hispanic population, there are other markets they’re in will be foreign investment,” she said. several important challenges experiencing the same pattern,” Diversification also means that they must overcome, said said Lenny-Passagno. “It would diversifying within the US. Chilean Pérez. These include the size be a logical next step for Chilean investment has traditionally of the market, with the demand companies to look at the US been concentrated in the states and logistical challenges that market and a great diversification of Florida and California. For implies, as well as the level of strategy.” Chilean start-ups in particular, sophistication of US consumers Pérez agrees. He said that Silicon Valley is the gateway to and the different market the advantage of diversification venture capital and support for conditions. is protection against a fall in technological innovation. Chilean “Chilean firms like Falabella demand in certain markets. The real estate firms, meanwhile, and Cencosud are market leaders US is also a market that welcomes have raised skyscrapers in in Colombia and Peru, but they innovation in niche products and Miami, which is also a destination wouldn’t be in the US,” he said. services. “The idea is to be less and cargo hub of LAN Airlines.
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COVER STORY
has been signed by Chile and the United States but still needs a congressional rubber stamp in both countries, will create an even more favorable environment for Chilean companies to invest, she said. Roxana Orellana knows that expanding in the US will be a tough test for her company. But she likes the chances of success for Romatech’s electricity metering device, which allows consumers to cut their energy bills. “America was not a saving “The US is the “It is still a good time country but that has changed unchartered frontier for Chilean real estate since the recession,” she said. for Chilean companies, companies to invest in the “Now is a good time to sell they are underweighted US, particularly in Florida, anything to do with saving.” in terms of their taking advantage that this As for investment promotion efforts like SelectUSA, Pérez said investment in the US.” market is still in a recovery they can help “on the margin” phase.” but if companies do not have the financial and logistical capacity Ellen Lenny-Passagno, to handle the US market then US Embassy Kevin Morgan, no amount of information will Crystal Lagoons USA change that. “The main variable is the condition and motivation of Chilean But companies like Romatech in the US can attest, American companies to invest,” said Pérez. are showing that there are also consumers are amongst the most Even so, personalized assistance opportunities in states like Texas. demanding in the world. In fact, can help, especially for medium Chilean companies are not the according to Lenny-Passagno, size companies like Romatech that only ones that have sensed an the Spanish call the US their are new to the US market. opportunity. Multinationals from “Frank Sinatra market” – if you The United States represents an other Latin American countries can make it there, you can make opportunity for Chilean companies are also moving in. Colombian it anywhere. to not only diversify, but also to grow cement producer Argos, for “This is a way for foreign in a sophisticated market with huge example, is banking on a recovery companies to ensure they are potential. With President Obama in the US housing market and continually improving their rolling out the red carpet for foreign rising demand for concrete after processes and their offering,” investors, you could say there has buying the southeastern US she said. “It’s like a free never been a better time for Chileans assets of France’s Lafarge for consulting service.” to make it in America. As the Sinatra US$760m in 2011. US tax regulations are also song goes, it’s up to you. bUSiness chile “The US is looking for investors relatively simple, but it helps from Latin America, not just to use a good accounting firm. Chile,” said Pérez. “It may seem overwhelming at first, but the beauty is that once Julian Dowling is Editor of bUSiness CHILE Frank Sinatra market you understand the regulations everything is very clear,” said To obtain more information about the But companies must be prepared Lenny-Passagno. SelectUSA program, please contact the Commercial Service at the US Embassy in to work hard. As Chilean firms A double taxation treaty, which Santiago: [email protected]
20 December 2013 business Chile www.businesschile.cl The world is waiting.
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JOB #: 10136929 10136929-1 • American Airlines Duped from 10103912-1 by: byn TITLE: SCOPE OF SERVICE PRINT PRODUCER: NORITA JONES Path: Production3:AmericanAirlines:Jobs:BillableJobs:1012000Jobs: PROJECT MANAGER: LOUISE SCHELHAMMER Trim: 215mm w x 280mm h Bleed: None Live: N/A ACCOUNT MANAGER: PATRICIA VIRGILIO Page 1 of 1 Date: 8/27/13 Proof #1 ART DIRECTOR: Inks: 4/C Revised by: byn CPS CheckOut: ______SHIP: 8/28/13 PUBLICATION & INSERTION DATE: Agency Approvals: INITIALS DATE Supervisors: INITIALS DATE Amcham Chile Business Magazine, 8/29/13 Proofreader ______Project Mgr. ______Copywriter ______Acct. Sup. ______Art Director ______Prod. Mgr. ______Creative Director ______Client Approval: INITIALS DATE Account Exec. ______Special Report Generation Y in Chile: What do Millennials Want? According to a new survey, Millennials in Chile believe in the power of technology, are optimistic about the economy and think they can make a difference in their country, but companies aiming to use their talents must adapt to their interests or risk losing them. By Julian Dowling
ernardita Pérez can’t live without her iPhone. The 26-year old Chilean entrepreneur uses it B to arrange meetings, organize events and answer emails. “It’s very hard for me to give up my iPhone because it’s my main tool for work,” she said. Pérez is co-founder of the startup People Connect that organizes networking events for young professionals in Chile. She and her cousin came up with the idea for lunches sponsored by local companies a few years ago. Since July 2012, they have held nine ‘Free Lunch’ events with each drawing around 400 people. Given their success, they are now planning to develop Free Brunches as well as an online creative and likes “innovation, any idea or goal,” she says. networking platform, she said. change and challenges”. Like That is not to say Millennials “The idea is for young executives others of her generation, she also are lazy. Today, this generation is to increase their network of feels the need to stay connected becoming more important in Chile professional contacts through through technology to what is as they start their own businesses human relationships and not just happening in the world. or join the workforce. According on the Internet,” she says. “It’s a very open generation, to Chile’s National Statistics Pérez is part of the Millennial we’re always seeking new Institute, there were an estimated generation, also known as opportunities,” she says. 4 million Millennials living in Chile Generation Y. Born between 1980 But she is also sharply critical in 2010, representing nearly a and 1995, this generation grew up of her generation’s shortcomings. quarter of the population. Around with the Internet and cellphones. “We have always had more or 300,000 of them enter the labor In some ways, Pérez is a typical less everything we need and it is market each year from universities Millennial. She sees herself as hard for us to make a sacrifice for and technical colleges. But
22 December 2013 business Chile www.businesschile.cl employers often know little about what motivates and interests them. Chilean Millennials are not very different from their peers in the US, says Jason Dorsey, a 29-year old American author, known as The Gen Y Guy, who recently spoke in Chile at an event organized by the BlackSheep Social Media Center. Millennials are not “tech-savvy” but rather “tech- dependent”, he said, “If you want us to take out the trash you better text us”. Millennials also need to be taught basic skills like how to dress properly in the workplace – “Show us examples so we know what you want,” he said. For employers, this represents a challenge. Although university graduates tend to be more adaptable and malleable than older workers, they are also more likely to seek greener pastures elsewhere, said Patricia Leighton, a Senior Consultant at Santiago-based Boyden global executive search. “There are downsides but there are also positive things about recruiting younger generations,” she said. The recruiting process also looks different. These days Millennials show up for job interviews with an iPad rather than a notebook, she said. But beyond the technology, the workplace environment is also changing to suit Millennials. Birgit Nevermann, manager of Laborum Selección, the recruitment division of Chilean employment site Laborum.com says that companies have no choice but to adapt to the demands of the new generation. “Millenials are looking for jobs where they can have a good time, they don’t want a job for life,” she said. The key for recruiters, she says, is to figure out what Millennials want and give it to them. But that is not as easy as it sounds.
Adapting to Gen Y
Some companies in Chile have successfully adapted to Generation Y. Take Parque Arauco, a Chilean mall developer with operations in Chile, Peru and Colombia. Following a recent change in management, the company began hiring Millennials Special Report
chat with on WhatsApp”.
Technology dependence
A recent global survey of Millennials by Telefónica and the Financial Times shows that Chilean Millennials are even more connected than their counterparts in other Latin American countries. “We are a freer generation “Our biggest takeaway This is partly due to smartphone and less focused on from our work in Chile penetration. According to the what we ‘should be’ but was how willing Gen survey, which included 500 Chileans aged 18 to 30, 73% constantly in search of Y was to be engaged of Millennials use smartphones something more.” in conversations on compared to 68% in Latin everything from new America. In addition, 89% believe products to employment.” technology has made finding a Bernardita Pérez, job easier versus 85% in the People Connect Jason Dorsey, The Gen Y Guy region. “It’s a hyper-technologized two years ago and, as of generation,” said Carola Courard, September, it had 66 employees vacations, she said. Although a market intelligence consultant between 20 and 30 years old out a good salary is appreciated, at Telefónica Chile. “Chileans feel of a total of 220. money is only important insofar even more comfortable with new “We have to prepare the as it meets their living needs, she technology than in the rest of the younger generation to eventually said. “They are not thinking about world.” replace us, so that makes us getting married and supporting a This also affects their work more open to their personal family like previous generations.” habits. According to Courard, characteristics,” said Carolina More important for Millenials is Millennials suffer from what she Galletti, the company’s manager the “challenge” of something new, calls a Fear Of Missing Out, or of human resources. she said. They do not care for FOMO. This explains why they But working with young people long-term goals, but are focused are constantly checking their has taken some adjustment, she on short-term objectives. Pérez smartphones, she said. For older admits. “They know exactly what couldn’t agree more. “For me, generations, this technology they want out of life… they don’t working from 9 to 5 is ridiculous! obsession can be hard to deal live to work, they work to live.” It’s much more attractive to have with, but it also has an upside for Parque Arauco works with goals and achieve objectives,” companies. several headhunters to recruit she said. Parque Arauco, for example, Millennials out of university When it comes to their gives its employees smartphones but keeping them motivated is employer, Millennials look for a and has created a new Intranet that a challenge, she said. “If your boss who guides, teaches and has the look and feel of Facebook, company wants to keep them warns about possible dangers, said Galletti. This allows its interested, you have to give but leaves you free to experiment employees to communicate and priority to their interests.” and move forward, said Pérez. receive corporate information Her company has done this In other words, they want a and feedback, she said. by negotiating things like flexible “coach” more than a boss, said “It’s not a social network work hours and extended Galletti. “Someone they can because we can control the
24 December 2013 business Chile www.businesschile.cl
Success...
Boyden21,5x28 AmCham 11-13.indd 1 18-11-13 10:53 Special Report
in touch with their friends than to look for a job, said Leighton. “It’s about making themselves visible,” she said. The key is how access is managed within companies. The position of Web Manager is now common in many large Chilean companies, but smaller companies are just now learning how to use social media for marketing and communications, said Nevermann. Millennials are not going to give up their smartphones – “It is important to give like Pérez, they have become “What clients look for Millennials short term dependent on them – but they in candidates hasn’t goals because, unlike can be encouraged to use them changed, but what other generations, they in ways that benefit the company, Millennials look for in she said. don’t see themselves companies has changed staying in a company for Keeping Millennials happy and companies have to 10 years or more.” adapt.” Partly because of technology Birgit Nevermann, Carolina Galletti, and their access to information, Parque Arauco Laborum Selección Millennials in Chile are not staying in jobs as long as their employers comments, but the new Intranet had hoped. same strategies that work in is very similar to a social Where employers naturally the US will also work here, said network,” she said. “We knew worked somewhere for at least Dorsey. These include short-term we had to advance in technology three years, they are observing “stretch projects” every quarter, or be left behind.” Millennials who are leaving emphasizing the mission and Social media can also be an after six months because they culture of the company in addition important tool for recruiting felt “bored” at work, said Jason to the pay, he said. and marketing. The overall Dorsey. To make Millennials feel like engagement of social media for Unlike their parent’s generation, they are making progress, he recruiting is still much lower than Millennials do not expect to stay suggests giving them business in the US, but it is clearly on the put for a long period, said Parque cards and regular feedback, even rise in Chile, said Dorsey. Arauco’s Galletti. “They don’t something as simple as saying The younger generation can project themselves in a company “good job”. also find more creative ways of for 10 years, that’s impossible, Telefónica’s Courard agrees that exposing a brand, said Leighton. two years yes,” she said. young people need coddling. “With Millennials are able to think Turnover can be reduced if small details you can make the outside the box, which can help Millennials are a good match Millennial feel valued,” she said. companies to create marketing for the company, said Leighton, Multinationals in Chile are campaigns that appeal to others adding that some companies leading the way in this regard. of their generation, she said. like Procter & Gamble recruit For example, Citibank has Of course, social media is a candidates from universities and incorporated the idea of ‘home double-edged sword – sites then offer them opportunities for office’, which allows workers to like Facebook can be used for travel and advancement within telecommute; Coca Cola has a sharing proprietary information, the company. But even then system of flexible benefits, and which has led some companies Millennials tend to get restless. Procter & Gamble uses social to restrict access. But in general This problem is not unique media extensively. Millennials use it more to stay to Chile, which means that the Some companies have also
26 December 2013 business Chile www.businesschile.cl adapted their office environment be less optimistic about their job to suit Millennials. Telefónica prospects and more financially and Parque Arauco, for challenged than their peers in the example, have lowered partitions capital, said Dorsey. “There’s a between cubicles to facilitate strong contrast between urban communication and interaction. and rural in Chile,” he said. Other companies have eliminated “Access to economic opportunity office chairs completely, instead varies in different parts of the using Starbucks-type docking country.” stations to make Millennials to Another problem is the relatively feel at home, said Leighton. high cost of education in Chile, “Things have definitely said Dorsey. Building a highly changed and not just because skilled labor force that is able of technology but also because to be entrepreneurial and more of the benefits of moving around “If [Millennials] don’t sophisticated in the marketplace and interacting more,” she said. find a job that matches means making education “There’s less privacy, but younger their lifestyle and financially accessible, he said. people are more used to that.” interests, then they will Companies can offer future Mobility is not all Millennials employees scholarships and be switching around from look for – they also want to work tuition reimbursements to defray in a company that has social one job to the other.” costs, but improving access responsibility programs and cares to education and training about the environment. Leighton Patricia Leighton, opportunities in Chile is not just suggests companies offer bike Boyden the responsibility of the private racks, healthy snacks, recycling sector. “A quality education is programs, weekend excursions critical for the success of Chile,” and other things that appeal to in Santiago, also need qualified said Dorsey. Millennials. Not many Chilean candidates for their facilities in For now, Chile’s strong economic companies are doing this yet, but the north of the country in the growth and near full employment California-based tech companies case of mining, or the south in the means that companies looking like Pixar and Google are good forestry and salmon industries. to grow must adapt to attract role models, she said. The problem is that, given the best and brightest graduates. Even free food and nap Chile’s top universities are all in That might change in the future rooms, however, may not be Santiago, the best candidates though, especially if employment enough to stop Millennials from are concentrated in the capital. drops, pointed out Nevermann, moving on after a few months. The solution is to find graduates and the shoe could one day be But companies can protect who want to go back to their on the other foot. themselves through succession regions to contribute, said But Millennials are nothing if planning and using technology Nevermann. “This is positive for not optimistic. According to the to ensure that information is development of the regions and Telefónica survey, 90% of young shared within the company, said decentralization,” she said. Chileans believe the country’s Nevermann. But that is easier said than done. best days are still to come, versus “The idea is that people don’t Millennials are willing to travel while 67% globally. take the know-how with them they are young, but most prefer Adaptation can be difficult, but when they leave,” she said. “If to raise a family in Santiago, said companies able to harness the a manager leaves Shell, there is Nevermann. As a result, many large energy and optimism of Generation still gas at the pump.” companies send employees to Y will succeed where others fail. cities like Antofagasta or Puerto After all, Millennials like Bernardita Access to opportunities Montt to work shifts of a few days Pérez are Chile’s leaders of or weeks, which can have a high tomorrow. bUSiness chile The pool of university graduates cost. in Chile is relatively large. But Part of the problem is lack of resource-based companies, access to opportunities. Young Julian Dowling is Editor of bUSiness CHILE many of them headquartered people outside Santiago tend to
www.businesschile.cl business Chile December 2013 27 spotlight Good Corporate Citizens AmCham’s Good Corporate Citizenship Award celebrates socially responsible business practices at a time when companies in Chile need to build better relationships with consumers, workers and members of the communities where they do business. By Julian Dowling orporate Social Responsibility (CSR) is no longer a new concept in Chile. Eleven years C ago, when AmCham Chile created an award to recognize socially responsible business practices, this idea was relatively unheard of, but that has changed. Today, companies of all sizes, from startups to multinationals, have special departments and managers specifically devoted to CSR. The importance of social responsibility in Chile has grown as companies have realized that community programs, which are often promoted on social media, can help to build their brand value with workers and customers, while at the same time giving back to the communities where they do business. AmCham’s Good Corporate Good Corporate Citizenship Winners 2013: Rodrigo Mobarec, Colbún; Alfonso Salinas, GNL Quintero; Carolina Valdivieso, AmCham; Humberto Citizenship Award, created in 2002, is Ulloa, Komatsu Cummins; Gloria Salgado, Chilectra a annual competition for companies looking to see how their programs opinion of the jury, were the best CNN Chile and Poder & Negocios. stack up. The winners, which are examples of CSR in the country. As in Roberto Matus, General Manager selected by a jury, receive publicity previous years, the competition was of AmCham, spoke during the and recognition for their programs. tough – 23 companies presented a ceremony and emphasized that The idea is that other companies total of 28 programs in areas ranging responsible business practices will then be able to emulate them from education and training, to are key for the competitiveness throughout the country. energy efficiency and Wifi access. of Chilean companies in today’s Originally, AmCham gave just one The programs were evaluated using society. Social responsibility award for the best program nationally, a methodology developed by Chilean programs, he said, can add value but new categories have been added consultancy SustentaRSE. to a company’s products and including innovation, community Paola Berlin, a news anchor on CNN services, while improving the development, the environment and, Chile, hosted the awards ceremony at economic and social situation in most recently, small and medium- the Sheraton Hotel, which was attended local communities. sized enterprises. by members of the jury, AmCham “We believe the country has taken On October 25, AmCham handed directors and other guests. The important steps in this process and out its 2013 Good Corporate Citizen sponsors of the 2013 version included for us it’s very important to be a part Award to four projects that, in the Arauco, Diario Financiero, Deloitte, of this activity,” he said.
28 December 2013 business Chile www.businesschile.cl Carolina Valdivieso, Vice President The business community only has aspects: economic, environmental of AmCham, spoke on behalf of itself to blame for this situation, and social,” he said. First Lady Cecilia Morel, a member but it is not too late to turn things of the jury who was unable to around, he said. Rebuilding trust attend. She said the award is an “There is no one who is blameless, “especially noble initiative” because we can’t point fingers, but we are But the energy sector is leading the it is focused not only on the material in the process of changing and way in rebuilding this trust. The winner benefit for the community, but also improving these practices,” he said. of this year’s main prize, GNL Quintero, its “spiritual” well-being. He cited a survey by Acción RSE is a prime example of an energy But companies need to do of Chilean university students, company that is doing something to more, said Ignacio Larraechea, which showed that 82% believe restore confidence in the sector. The CEO of the Chilean CSR non- that companies only worry about consortium – comprised of Terminal profit Acción RSE. He pointed out maximizing their profits at the de Valparaíso, Metrogas, Endesa and that although CSR now attracts expense of the well-being of people Enap – presented a project that has some of Chile’s best university and the environment. helped fishermen in communities graduates and many companies This lack of trust, he said, is near its LNG regasification terminal at now have codes of business reflected in the energy sector where Quintero, on Chile’s central coast, to ethics, there is room to improve. several large power generation diversify their productive activities and High profile cases of business projects needed for Chile’s improve their economic situation. malpractice in Chile have shaken economic development have been “The program empowers people as consumer confidence, while labor put on hold or cancelled due to agents of change in their community conflicts have increased in frequency local opposition. through training, access to networks and duration, entailing higher costs “Building trust is, today, the main and support for production for companies, said Larraechea. challenge for Chile to develop in all diversification projects,” said Javier
COLGATE LUMINOUS WHITE, TODO LO QUE NECESITAS PARA BRILLAR.
UN TONO MÁS BLANCO EN UNA SEMANA.* *Utilizar la crema dental para obtener este beneficio. spotlight “We hope that businesspeople step up and see that rehabilitation of young offenders is possible… Crime affects us all and we must fight it together,” said Humberto Ulloa, Manager of Legal Affairs at Komatsu Cummins and a member of Fundación Reinventarse’s board.
Looking to the future
All the prizewinners agreed that the business environment in Chile is complicated given the current climate of distrust. But they also expressed optimism that projects like the ones they presented this year can make a difference, not just by showing Ignacio Larraechea, Acción RSE that companies care about their communities, but also by having a real Irarrázaval, President of AmCham’s training of the new technicians who will impact on the lives of stakeholders in Social Responsibility Committee. work for us and our subcontractors,” these communities. The benefits for the company are said Gloria Salgado, Communications As Salinas at GNL Quintero pointed also clear. While other projects in Manager at Chilectra. out, ignoring these stakeholders is the Quintero area have had trouble In the Environment category, not an option – and supporting them getting environmental approval, it power generator Colbún won for a makes employees and customers feel has managed to get approval without project that addresses Chile’s water good. “It’s like we are all happy that much opposition, said Alfonso shortage. In some areas of central Chile qualified for the World Cup, Salinas, Sustainability Manager at Chile the company competes for why are we happy? Because we’re the company. water resources with farmers, but in Chileans,” said Salinas. “To be frank, the work we are the Maule Valley it saw an opportunity doing is not inspired by this, it’s not for cooperation rather than conflict. Jury Members so they let us do more projects, it’s It has an agreement with the inspired by a real commitment to the Farmers’ Association of Maule Sur to The jury that selected the winners community,” he said. provide training in efficient irrigation of AmCham’s Good Corporate Citizen As long as the stakeholders in techniques and technology transfer Award 2013 was formed by: Cecila Quintero remain impoverished the focused on small-scale farmers. It also Morel, First Lady of Chile; Kathleen project is not sustainable, said Salinas. promotes the development of mini- Barclay, President of Amcham; Javier “We have to help them improve their hydro projects on irrigation channels Irarrázaval, Director of AmCham quality of life.” administered by the association. and President of AmCham’s Social Two of this year’s other winners Finally, the number of young people Responsibility Committee; Jeffrey Vick, – Chilectra and Colbún – are also driven to crime is a major problem Consul General at the US Embassy related to the energy sector. In the in the most vulnerable Chilean in Chile; Cecilia Castro, President Community Development category, communities. The company that won of Corporación de Dirigentes de Chilectra won for its project Cátedra in the Innovation category, Komatsu Campamentos; Ignacio Larraechea, Chilectra that aims to improve Cummins, saw an opportunity to CEO of Acción RSE; Gonzalo Delaveau, employment prospects for students rehabilitate young offenders and give President of Chile Transparente; Bruno of electrical programs at the country’s them a path to employment. Its project, Krumenaker, President of Generación technical colleges. It works by taking Reinventarse (literally, reinventing Empresarial; and Andrés Santa Cruz, an integral approach to education, yourself), provides psychological President of the Confederation for focusing on the academic, personal support and counseling to help young and family development of students. people finish high school and then For more information about AmCham’s Good “Our workers are the ones who give places them in internships in the Corporate Citizenship Award please contact the classes and get involved with the company. [email protected]
30 December 2013 business Chile www.businesschile.cl
AMCHAM News New AmCham General Manager Appointed Roberto Matus has been appointed as to 2006, he was head of the Economic the new General Manager of AmCham and Trade Office of the Chilean Embassy Chile as of October 1. Matus is a Chilean in the US. In this position he worked on diplomat with over 20 years of experience the negotiations towards a free trade in the Foreign Affairs Ministry. agreement between the two countries, Since September 2009, he served as and led the strategy for approval of the Deputy Chief of Mission at the Chilean agreement by the US Congress. Embassy in Washington, DC. In this “Matus’ extensive knowledge and vast position, he participated actively in the experience in economic, commercial negotiations of the Chile-Massachusetts and political matters of the Chile-US agreement, various presidential visits and relationship is a valuable asset in the was in charge of managing the Embassy. new era of development and growth Between 2006 and 2009, he served that AmCham Chile will face in the as Chief of Cabinet of then-Foreign coming years,” said AmCham President Roberto Matus Minister Alejandro Foxley. From 2001 Kathleen Barclay.
UC Davis Professor to Chair Chile-California Council
Professor Lovell Jarvis has been appointed Chairman of the Chile-California Council. He replaced Agustín Huneeus, who had chaired the Council since its creation in 2011. Isabel Valdés and Francisco Silva were selected as Vice Chairs for Chile and California, respectively. Jarvis is professor of Agricultural and Resource Economics at the University of California, Davis, where he is also Special Assistant to the Dean, College of Agricultural and Environmental Sciences; Director of the Richard Blum Center for Developing Roberto Matus, AmCham; Terry Yosie, WEC; Fernando Hentzschel, CER; Rafael Lorenzini, Economics; and Faculty Director of the UC AmCham and Jorge Plauchú, energy and climate change consultant Davis-Chile Partnership Program, which he initiated in 2008. Jarvis has a PhD in Energy Seminar on Socio- Economics from MIT. “I look forward to promoting dialogue and Environmental Management discussion on a broad range of issues that are important to both Chile and California. Each On October 15, the Chile-US Energy Business Council organized a has perspectives and experience of value to seminar that focused on the socio-environmental management of energy the other,” he said. projects. AmCham General Manager Roberto Matus and the Council’s Executive Secretary, Rafael Lorenzini, attended. Other guests included Terry Yosie, CEO of the World Environment Center (WEC), Fernando Hentzschel, head of the Technical Division at the Chilean Center for Renewable Energies (CER), and Jorge Plauchú, an international energy and climate change consultant. Yosie talked about how new technologies are changing the energy scenario in the United States, and Hentzschel explained the Chilean government’s non-conventional renewable energy initiatives. Finally, Plauchú discussed the evolution of energy efficiency and the new Professor Lovell Jarvis concept of “eco-efficiency”.
32 December 2013 business Chile www.businesschile.cl New MEMBERS
Panexport Industrial Equipment Lunch on Corporate Donations to the Arts Stanislaw Lozecznick, On October 16, Roberto Managing Director Ampuero, Minister of the National Council for Culture Aden Business School and the Arts, spoke at an Education & Training AmCham lunch about the Patricia González, importance of corporate Corporate Director donations for the arts as a means to promote Chile’s Seko Logistics Chile development. Transport and Logistics AmCham President Gonzalo Aravena, Kathleen Barclay and Account Manager General Manager Roberto Matus attended the lunch. OTEC Instituto Chileno Other guests included Norteamericano Borja Baselga, director of Education and Training Fundación Santander, Robert Lynch, president of the organization Americans for Ricardo Mery, the Arts; Rupert Myer, chair of the Australia Council for the Arts, and Juan Carlos Executive Director Silva, legal advisor at Chile’s Culture Ministry. The lunch preceded the 4th Seminar on Culture and Economy, which was held Jogo at the Centro Gabriela Mistral (GAM) on October 17. Titled “Towards a Sustainable Early Education Materials Culture” and sponsored by AmCham amongst other organizations, this was a Pablo Gaete, space for reflection about financing for the arts, new tax incentives and the impact General Manager of culture on development. AmCham Committees
On October 2, Matías Vergara, On October 18, the Legal a specialist in communications Committee held a meeting on US and coaching, was invited to a visa requirements and the Visa meeting of the Marketing and Waiver Program. The speakers were Communications Committee. His US Consul General in Chile, Jeffrey talk was titled “Neuro-Linguistic Vick; Vice Consul Sara Clymer, and Programming: Understanding Stephen Buchanan, attorney for the the Customer”. TLC Trade Company.
Kathleen Barclay, AmCham; Carolyn Robert, IDB; Sandra Miró, AmCham; Andrés Rebolledo and Sebastián Marambio, IDB.
On October 16, Carolyn Robert, International Trade Lead Specialist at the Inter-American Bank of Development (IDB), spoke at a meeting of the Trade Facilitation Committee. She discussed IDB Fabio Miranda, American Express; Claudia initiatives to identify the main Torres, Bodegas San Francisco; Matías barriers affecting international Vergara, Universidad Andrés Bello, and Felipe Stephen Buchanan, TLC Trade Company; Sara Serrano, Agencia de Aduanas and Patricia trade. Sandra Miró chaired the Clymer, US Embassy; Jeffrey Vick, General Consul, Gallardo, AmCham. meeting. and Michael Grasty, AmCham
www.businesschile.cl business Chile December 2013 33 AMCHAM News
AACCLA 2013 Annual Meeting and Conference
Chile’s Foreign Minister Alberto Moreno addresses the AACCLA meeting via video conference.
AmCham President facilitation were also reviewed. Kathleen Barclay and CEO Foreign ministers from the Roberto Matus attended Pacific Alliance countries the 2013 annual meeting addressed the conference by and conference of the way of video conference. It Association of American was the general feeling of the Chambers of Commerce in audience that the creation of Latin America (AACCLA) the Pacific Alliance is one of the from September 29 through most significant developments October 2 in Washington, in strategic foreign policy to DC. During the three days of come from the region. meetings, discussions were In other news, AmCham Chile held with senior member of Director and country head for the US State Department, DHL, Sandra Miró, was elected Department of Commerce to the board of AACCLA. and the United States Trade Meanwhile, Luis Alberto Representative, as well as Moreno, president of the Inter- with senior business leaders American Development Bank from across the hemisphere. (IDB) was awarded AACCLA’s Key areas of interest included highest honor – the Eagle competitiveness, energy and of the Americas. Overall, education (within the context the tone of the meeting was Sandra Miró, AmCham Chile Director and AACCLA of workforce development). very positive with respect to Vice President Progress with respect to the region’s future including the Trans-Pacific Partnership growth opportunities for the and initiatives regarding trade private sector.
34 December 2013 business Chile www.businesschile.cl Su estrategia de negocios
Resultados rápidos concretos y medibles. Clases presenciales desarrolla programas de y virtuales. Inglés Corporativo Profesores nativos, altamente especializados. licenciados y certificados.
[email protected] (56-2) 2412 6670 www.sesachile.cl
www.businesschile.cl business Chile December 2013 35 AMCHAM members News Concha y Toro Launches Sustainability Report 2012
On October 1, Viña Concha y Toro launched its first ever Sustainability Report at a breakfast at the Hyatt Hotel. Valentina Lira, assistant manager of sustainable development for the winery, presented the report to media and other guests. This report was prepared under the Global Reporting Initiative (GRI) methodology. Its contents are divided into six strategic pillars: Product, Customers, Supply Chain, People, Society and the Environment. These were defined considering the opinions of different stakeholders including suppliers, wine industry associations and employees’ representatives. “Each pillar has defined objectives which allows us to evaluate and plan our next steps, because we understand sustainability is a path of permanent change and improvement,” said the company’s Alfonso Larraín with Valentina Lira and Cristóbal Goycoolea, president, Alfonso Larraín. The report is available as an application Concha y Toro’s Manager of Sustainable Development for iPad and iPhone in the App Store.
Proforma Partners with Coquimbo Industrial Association
In October, OTEC Proforma signed an agreement with the Industrial Association of Coquimbo (Asoinco) to provide human resources advisory services to companies in the Coquimbo Region. Rubén Vega, president of Asoinco, and Sandra Urban Land Institute Meeting (left to right): Fernando Fischmann and Kevin Morgan, Bravo, regional manager of Atacama and Coquimbo Crystal Lagoons; Cristián Alliende, Aconcagua, and David Feltman, Aegon USA Realty for Proforma, signed the agreement during Advisors ProvExpo 2013 at the Hotel Enjoy Coquimpo. The Crystal Lagoons at Chicago Real Estate Meeting Expo brought together mining, energy and services companies to network and discuss investment On November 5-8, Chilean multinational Crystal opportunities in the Coquimbo Region. Lagoons gave a presentation in Chicago at the most important annual meeting of the US real estate sector– the 2013 Fall Meeting of the Urban Land Institute (ULI). “We are very proud to present at ULI on the exponential growth of Crystal Lagoons’ technology and concept in less than five years, and to announce our first US project in Florida,” said Kevin Morgan, CEO of Crystal Lagoons USA. In October, Crystal Lagoons, which develops crystalline lagoons around the world using its patented technology, announced a new project in Thailand. The project, called Mahasamutr, will consist of 90 luxury villas, all of which will have access to a seven-hectare crystalline lagoon.
Crystal Lagoons’ project Carla Guerrero, Francisca Araya and Sandra Bravo, Proforma; Rubén Mahasamutr in Vega and Jorge Garrido, Asoinco; Daniela Ríos, CAP Minería and Oriella Thailand Bertolla, Proforma
36 December 2013 business Chile www.businesschile.cl UPS Business Monitor Latin America 2013 Executive Appointments The sixth edition of the UPS Gabriela Peralta was Business Monitor Latin America was recently promoted to launched at the Atton Hotel in Santiago general manager and legal in September. According to the study, representative for American Latin American executives consider Airlines in Chile. With 22 years the recruitment and retention of in the company, Gabriela has
qualified staff, as well as government Gabriela Peralta, acquired extensive experience support, to be key to enhancing the American Airlines in many areas, including as a competitiveness of small and medium- reservations agent, account size enterprises (SMEs) in the region. executive, Premium Services Executives surveyed in the study, and Admirals Club coordinator, which is sponsored by UPS and and airport manager prior to covers seven countries in the region her current position. including Chile, said that governments must focus on improving access Ricardo Martínez has joined to capital and financing, as well as the financial consultancy Proforma Partners with education and training. The study José Acosta, Acender in the position of UPS Americas Region Coquimbo Industrial Association indicated that 47% of executives said associate director of Risk & that they are in a better economic Technology. He has previously position than they were a year ago. worked in financial and “The study clearly demonstrates that Latin America is at the forefront consulting firms in Chile and of growth and we see that SMEs are predominantly optimistic about Ricardo Martínez, abroad. His last job was at the coming months,” said José Acosta, president of Latin American Acender Teradata, as Senior Industry operations and public affairs for UPS Americas Region. Consultant, leading various projects at the regional level. Asexma Annual Meeting at Casa Piedra Ricardo Ceballos is the new The Chilean Association of Exporters general manager of Royal (Asexma) held its annual meeting at Santiago Hotel, operator of CasaPiedra in Santiago on December the Radisson Hotel chain in 17. The event, titled A Corazon Abierto Chile. A Colombian executive, (Open Heart), was billed by Asexma he has vast experience in the President Roberto Fantuzzi as a Asexma Invitation hospitality industry, having “surgical intervention” to discuss Chile’s Ricardo served previously as sales current economic system. Around 1,200 Ceballos, Royal executive and director of Royal Santiago Hotel executives and government officials were expected to attend. Hotels of Colombia, as well as director of Royal Santiago Hotel.
Bci Business Meeting in Antofagasta The 9th annual Bci Business Meeting was held in Antofagasta in October. It included 600 meetings between small and medium-size companies and purchasing divisions of 30 large companies. “The biggest challenge for SMEs is to diversify their portfolio of clients because they do not always have the networks and time needed to offer their products or services to new customers,” said Juan Pablo Stefanelli, manager of Bci’sEntrepreneurs’ Bank. “This type of meeting is an important space Juan Pablo Stefanelli, Bci; Claudia Meneses, Economic Secretary for Antofagasta for them to expand their networks,” he said. (Seremi), and Tomás Flores, Undersecretary for the Economy Ministry.
www.businesschile.cl business Chile December 2013 37 AMCHAM People Senators Debate Presidential Proposals On October 21, Senators Alberto Espina, Ximena Rincón, Francisco Chahuán and Ricardo Lagos Weber were the speakers at an AmCham breakfast at the Intercontinental Hotel in Santiago. They discussed some of the main proposals of presidential candidates Evelyn Matthei and Michelle Bachelet. Gustavo Manén, Political Editor at CNN Chile, moderated the discussion. 1 2
3 4 5 6
1 Francisco Chahuán and Alberto Espina (National Renewal Party, RN); Ximena Rincón (Christian Democratic Party, DC); Kathleen Barclay, AmCham, and Ricardo Lagos Weber (Party for Democracy, PPD). 2 Ernesto Byrne, Radisson Chile, and Eduardo Moyano, Inversiones Moyano Luco 3 Gabriela Chamorro and Ashley Worne, CBRE Chile; Pilar Pérez and Consuelo Espinoza, Unipack Chile 4 Valentina Santa María and Alfredo Patiño, HiLinks Comunicaciones 5 Jaime Bazán, Chile Transparente; Paulina Salman, HiLinks Comunicaciones, and Toshihiro Shimazaki, Mitsubishi Chile 6 Juan Somavía, Anglo American; Roberto Matus, AmCham, and Gonzalo Biggs, Figueroa, Valenzuela y Cía. 2013 Good Corporate Citizenship Awards On October 25, AmCham’s 11th annual Good Corporate Citizenship Awards were announced in a ceremony at the Sheraton Hotel. The awards recognize member companies with corporate social responsibility programs that directly benefit the community. 1 2
3 4 5 6
1 Christopher Lathrop, Rodrigo Valencia, Kahori Shigeta and Humberto Ulloa, Komatsu Cummins 2 Sergio Carstens, María José Riffo, Patricio Oyanadel, Eliana Cavieres and Jorge Delgado, Codelco 3 Ignacio Larraechea, Susana Rojas and Bárbara Asenjo, Acción RSE; Javier Irarrázaval, AmCham; Sandra Miranda and Diego Poblete, Aramark 4 Olaya Cambiaso, Fundación Chile, and Paulina Soto, CNN Chile 5 Max Massardo, Paulina Rodríguez, Gonzalo Tagle, María José García and Sergio Giacaman, Essbio 6 Alfonso Salinas, GNL Quintero; Sebastián Silva, Feedback and Antonio Bacigalupo, GNL Quintero
38 December 2013 business Chile www.businesschile.cl Breakfast with Presidential Candidates’ Economic Advisors On October 4, Felipe Morandé and Alejandro Micco, economic advisors to presidential candidates Evelyn Matthei and Michelle Bachelet, respectively, debated their candidates proposals at an AmCham breakfast at the Ritz Carlton Hotel. The debate was moderated by Nicolás Paut, Economy Editor at CNN Chile. 1
2 3 4 5
1 Nicolás Paut, CNN Chile; Alejandro Micco, economic advisor to Michelle Bachelet; Felipe Morandé, economic advisor to Evelyn Matthei, and Ricardo García, AmCham 2 Nicolás Chiappara and Gabriel Calgaro, Cisco Systems 3 Roberto Alarcón, Yamana Gold; Pamela Werbin, Boyden; Ximena Niño, Deloitte and Marcelo Prado, Caterpillar Leasing Chile 4 Rafael Lorenzini, AmCham, and Pablo Cruz, Relsa 5 Rodrigo Hollmann, Burson-Marsteller; Luis Guillermo Cerna, Develop International Consulting; Mónica Retamal and Martín Lewit, KI Teknology Amcham special
Executives at the Chile- Massachusetts Energy Forum: William Phillips, Chilean Energy Efficiency Association (AChEE); René Muga, the Chilean Generators’ Association; María Paz de la Cruz, Center for Renewable Energies (CER); Paul Schioltz, Methanex; Rafael Lorenzini, AmCham, and Carlos Finat, Chilean Renewable Energy Association (ACERA). Facing Chile’s Energy Challenges At a recent meeting in Boston, Chilean executives learned how Massachusetts’ experience in promoting non-conventional renewable energy technologies and building green communities could help Chile.
By Rafael Lorenzini
he Chile-Massachusetts States, Felipe Bulnes. Kathleen Non-Conventional Renewable Energy Forum was held Barclay, president of AmCham Energy (NCRE), shale gas, energy in Boston on September Chile and the Chile-US Energy efficiency and smart grids. The 25-27 to address the Business Council, represented the debate demonstrated the clear T challenges of the energy Chamber. Other guests included framework of collaboration industry in Chile. MIT professor representatives from Chilean that exists between Chile and Arnoldo Hax, who is president of energy companies, the State of Massachusetts. Along with the Chile-Massachusetts Council, Massachusetts, research institutes cooperation in education and attended along with Chile’s Energy and universities such as Harvard biotechnology, energy is one Minister, Jorge Bunster, and and MIT, among others. of the pillars of an agreement Chile’s Ambassador to the United Topics discussed included signed by President Piñera and
40 December 2013 business Chile www.businesschile.cl Amcham Chile and the Following Sponsor Companies Wish You a Merry Christmas Amcham special
Massachusetts Governor Deval become more involved in energy Chile as a natural laboratory Patrick in 2011. efficiency projects and distributed for these types of generation Minister Bunster stressed that generation (power produced by technologies. She pointed out that future efforts in Chile should be consumers). Chile is one of the few countries based on three axes: generation, According to the Chilean Center in the world that offers an ideal connectivity and the consumer. In for Renewable Energy (CER), in geography for the development generation, he said opportunities September non-conventional and installation of diverse sources should be identified for new renewable energy, including of non-conventional renewable technologies, Liquefied Natural bioenergy, mini-hydro, wind and energy. Gas (LNG) and NCRE. He also solar, represented 6.06% (or A theme at the meeting, which said lower barriers to entry 1,069MW) of Chile’s total installed has attracted the attention of would improve competitiveness capacity. Given the recent stakeholders around the world in Chile’s central and northern enactment of Law 20/25, which and not just in Chile, is the electricity grids (the SIC and SING, establishes the goal of obtaining increasing involvement of social respectively). Connectivity, he 20% of energy supplies from NCRE actors. According to a study by said, requires robust transmission projects by 2025, this percentage Chile’s National Human Rights and distribution networks that are should more than triple in the next Institute (INDH), 40% of socio- easily accessible to new actors. decade. environmental conflicts in the Regarding consumers, he said At the forum, AmCham’s Barclay productive sector involve energy these should be encouraged to emphasized the benefits of using projects. “The problems are not technical, they are political and and professor at MIT, stressed leadership and market signals social,” said Hax. An example is that all require special care from the authorities. New the opposition to the controversial with communities. Issues initiatives, such as the Inter- HidroAysén hydroelectric project such as compensation, timely Ministerial Committee on Energy, in Chile’s Aysén Region. communication, and the which is promoting energy But communities can be a part involvement of civil society in efficiency as part of the national of the solution. The experience energy projects can be transformed energy strategy, are welcome. of Massachusetts’ Green into opportunities. Thanks to the Boston forum Communities Act, enacted in In energy efficiency there is and the work being done by the 2008, shows the desirability of also a big opportunity. According Energy Business Council, these establishing fluid communication to experts, it is the fastest and issues are being addressed fully with communities, which are cheapest energy available. The and concretely with a view to committed to resolving the state of Massachusetts has drafting a report titled “Seven challenges of energy development. achieved the highest levels of Challenges Facing the Energy No project is exempt from energy efficiency in the United Industry”, which should be environmental impacts. Some States for years, and this is available in early 2014. bUSiness chile studies favor a certain type of partly due to the participation generation, such as wind or of different sectors of society, solar, but Lawrence Susskind, a but also to the government’s Rafael Lorenzini is Executive Secretary of the leading public policy mediator leadership. Chile needs stronger Chile-US Energy Business Council
Co-Organiza:
Av. Vitacura 2909, Of. 307. Las Condes, Santiago – Chile. Oficina: +56 2 28473300 / Fax: +56 2 28473310 [email protected] / [email protected] InteRview Promoting Chile Abroad By Julian Dowling
rincipal Financial Group is a US-based Fortune question is not whether commodities prices will keep rising, 500 company that manages assets worldwide but when they will fall. In the US the question is when the totaling over US$450 billion. Together, Brazil, [Fed] tapering will start. Cheap money will disappear globally Mexico and Chile represent 20% of the group’s and the question is when. These two trends could have an P holdings. In Chile, it owns pension fund manager impact on a country like Chile that is open to the world. AFP Cuprum and manages US$43 billion in assets. But if you look at Chile’s current account and its level of Roberto Walker, president of Latin America for Principal savings, and the fact it is a net creditor with respect to the International, is often on the road but on a recent stop in rest of the world, I think Chile is well positioned to face this Santiago he sat down with bUSiness CHILE to discuss the cycle that will not be as benign as in the last ten years. latest Chile Day and the post-election economic outlook. From the political side, it’s difficult to imagine radical Chile Day is an annual event organized by InBest that brings changes in the way the economy and government is together executives from around the world to promote Chile administered. Even though there are some things to as a destination for investment. This year’s version was held improve, the economic model is widely accepted in terms in September in London with over 300 Chilean executives, of the role played by the private sector in the development foreign investors and government officials. of the economy and the role of the government and institutions. But there are challenges from the point of view Was this your first Chile Day? of how to improve income distribution so more people Yes and I hope not the last. It was a positive experience; benefit from economic growth. The other thing is that the I was surprised by the interest generated by Chile Day, not most likely winner, Michelle Bachelet, has been President just from Chileans but also in Europe and other parts of the before and you can see what her policies were. world. It is healthy to recognize Chile as a country that is relatively small but well administrated and therefore needs What about the tax reform proposal? to promote itself. Maybe China and Brazil don’t have the We’ll have to see how this evolves. Obviously an increase same need because they are big countries, but Chile has in taxes has an impact on the value of companies, but the to be proactive in promoting its attributes. critical thing is to keep the economy growing at a high rate. That means investment, but to invest you need clear rules What is the attitude of foreign investors towards Chile? especially in terms of long-term investments. To finance Foreign investors have always been interested in coming these investments it is important to keep promoting to Chile. This is a global trend and I don’t think it’s temporary long-term saving, which is where pensions and asset or very recent. Companies in the world are looking for management comes in. I think the candidates understand opportunities to grow and we believe that emerging these things that are necessary for investment in Chile. markets will continue being the most dynamic part of the world economy. Is the pension system in need of reform? Chile offers attributes like political stability and a strong The system is good but needs improvement. Defined democracy. It has economic stability combined with benefit systems [whereby the working population pays economic growth, which excluding China is above the the pensions of those who have retired] belong in the average for emerging markets. It also has solid institutions past because they are all bankrupt. This has to do with and clear rules of the game. an aging population and a falling birth rate, which means the proportion of the population that is active is shrinking. Are investors concerned about the outcome of the The only way to resolve this problem is through a defined election? contribution system [based on individual contributions]. There are some concerns. The most important has more There is a consensus on this in Chile and, increasingly, in to do with the external situation than with Chile itself. The the rest of the world. strong commodities cycle is apparently ending and the But the system does need improvements. When it was
44 December 2013 business Chile www.businesschile.cl created the economic and demographic situation was very different, now people are living longer. The only solution is voluntary mechanisms for people to save more. It’s also important to improve the APVC (Collective Voluntary Pension Savings) mechanism [whereby employers complement their employees’ contributions], which allows the middle class to save more. The state also has to protect those who don’t have stable employment through the solidarity pillar.
Chile’s pension funds are internationally diversified but there are restrictions on foreign investment. Do the rules need to be changed? Pension and mutual funds have very diversified portfolios where the percentage represented by Chile is much less than 10 or 15 years ago. But the investment rules should be more flexible and the regulations should be much simpler.
In what way? There are a series of limitations on individual investment instruments. When you combine different assets the important thing is the risk/return ratio in your portfolio and it doesn’t make sense to put restrictions on each investment. There is an opportunity to simplify regulation without increasing risk in the portfolio to allow for more efficient administration.
What issues could be important at the next Chile Day? Chile has been able to differentiate itself from its neighbors and is doing things reasonably well. But the big opportunity is to work on making Chile into a financial center for Latin America. Chile can’t be a London, but it could be Singapore. Singapore made a decision to be a financial center for the region and created the mechanisms and incentives for asset managers to become established in that country. Chile has the ingredients, but first we need the vision that it can be done and secondly concrete measures to make it happen. I would like to see this on the agenda at the next Chile Day.
Should Chile aspire to this goal while income inequality remains a problem? One of the ways to improve income distribution is strongly based on economic growth and improving the quality of education. These are the two areas where investment should be concentrated so people can have a better quality of life. bUSiness chile
www.businesschile.cl business Chile December 2013 45 Life in the Slow Lane
Rock On By Santiago Eneldo
y wonderful mother and her friends were very keen on “growing old gracefully” and, by and large, they did just that! A very Anglo-Saxon approach to aging: very M proud and determined not to “be a bother”. They are now mostly just history but we can learn from them, well maybe I can learn from them. I keep being told to “act my age” and I find this for his last two songs he was alone on stage, his 16 extremely difficult because I can only “be the age I strong “band” having gone back to the Hyatt. I got to feel”. As I feel young and virile (well relatively), I still try bed at 2:30am! to do everything as if I was not just “young at heart” I want to live like The Boss and give it all I’ve got… but young in body as well. This causes all sorts of right up to the end. No “growing old gracefully” for drama… me. This brings me to a second issue: organ donation. For example, I like to stay (very) late at weddings Under a new law we in Chile are all donors unless which, in Chile, go on until sunrise or until there is we sign a notarized affidavit declining to give up our simply nothing left to drink except water. I have just organs for a good cause – such as saving another life. bought myself a new road bike and my family insists Well, let me give you this straight: I am delighted to let that this is “suicide on two wheels”. Unlike most others make the best possible use of my organs once Chileans I do not believe the ski season ends with the I have no further use for them – as in “definitely dead”, Independence Day celebrations (September 18th); I no pulse, departed, an absolute goner… However, my believe the season ends when there is no more snow! Master Plan is to ensure that my generosity will be The ski centers have to close when their passenger rejected on the grounds of “organs of no value”. Yes, flow (or snow line) gets below a certain point but like The Boss perhaps, I plan to keep on going for as where there is snow there is skiing. I will be climbing long as I can. I will max out on all the activities I have a (relatively) high mountain in December. In August I access to and when I am finally done you can auction was camping out at -15ºC. Am I tough? No way! I like off the remains. my “creature comforts” but I also love the adrenaline Please do not think I am being arrogant or selfish rush that comes with a great downhill run. or a prima donna. I just want to squeeze the very best Ah, but you have no idea how old I am... Here’s a out of life because you never know when… So, for all clue: I have three years on Bruce Springsteen – what you people worried about your retirement fund and a guy! If you were in Santiago on September 12 and legacies for the grandchildren, forget it and LIVE BIG. missed his concert then you missed something quite Rock on and on and on… extraordinary. Not just great music but a 64-year old teenager performing as if it was his debut. Three and I remain destined for greatness – in my own mind. a half hours and he never left the stage. At midnight his appreciative audience, including my son and I, Santiago Eneldo, were ready to say thank you and goodnight; but not Bruce – not The Boss. His encore lasted another hour! (Living big recommendations available at He would not let us go; HE wanted to give more and [email protected])
46 December 2013 business Chile www.businesschile.cl
Av Finanzas corporativas deals Rev AmCham 215x28.pdf 1 19-11-13 18:51