August 5, 2020

The Government wants to turn Chile into the main financial center of the region



The Chilean government hopes that the southern country will become the main financial center of the region, and turn it into an exporter of "world-class" services, said Finance Minister Felipe Larraín today.

"There is a greater challenge that Chile has in the financial market, and that is that the country will become the main regional financial center, of excellence and world class," said Larraín, when speaking at the Finance and Business meeting organized by the Chilean Institute of Rational Business Administration (Icare).

The head of Chilean public finances said that in order to reach that goal, two stages must be overcome: first, to be a financial pole in Latin America, and, second, to emulate the success that other countries have had for their financial sectors to be world-class. .

"We want companies to come to do their emissions, to raise funds in Chile and to be able to manage funds from Chile for third parties," he stated and assured that "in all those areas" the country has "advantages".

"Not in vain, the 10-year interest rate on Central Bank papers has been stable since the beginning of the year, while the US Treasury bond has increased 80 basis points, this is because we have a deep financial market, with many actors that give him liquidity, "he proclaimed.

Larraín cited the case of Singapore, a country that, he said, in 15 years increased its exports more than 6 times and the participation of this sector in GDP (gross domestic product) increased by 3 points.

"In Chile, exports of financial services amount to 456 million dollars (annual), which represents 4.52% of services exports, still well below important regional centers in the world," he said.

"If in the next 15 years the participation of the financial sector as a percentage of GDP will increase half of what grew in Singapore, employment in the sector would triple," he added.

He assured that, for the Government that Sebastián Piñera presides, to turn Chile into a regional financial center "is a priority issue, in which progress is being made on different fronts".

He gave as an example the modernization of banking legislation, recently approved in the Legislative, a personal data project, which is under discussion in the Senate, and a recently announced cybersecurity project.

To the above are added measures that do not need a law, said Felipe Larraín, who cited the Integrated Latin American Market (MILA), which in his opinion has not had the expected development, "for reasons that are often administrative" and Therefore, correcting them does not require legal adjustments.

"We have not taken advantage of it." In the meetings of the countries of the Pacific Alliance (Colombia, Mexico, Peru and Chile) we have discussed why the MILA (Latin American Integrated Market) has not had the take-off it should have taken, "he said. , and insisted that among the causes there are some administrative types.

"There are regulations that inhibit the potential of the financial sector," he said.

He also referred to the external scenario, highlighting "the resilience" of the Chilean economy.

"Despite the external turbulence, Chile recorded one of the biggest upward revisions in the growth of GDP 2018 in Latin America," said Minister Larraín, who reiterated that Chile has experienced three increases in its growth projection during 2018 in one period. of six months, up to a range of between 4.00% and 4.5% according to the Central Bank and from 3.8 to 4.1% according to the Government.

He said his ministry works on several measures to achieve sustainable economic growth, such as a Tax Modernization project prepared by the Government, with which the GDP would gain at least 0.6 more points during the next decade.

He also noted that with this project, the growth rate of the investment will gain between an additional 2.0 and 2.8% between 2019 and 2030.

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