Erico Wulf BUniversity of Lodz 2014

Poland

Chilean economy has been focused for more than 30 years ,on economic growth .

Markets have a decisive role in growth prospect.The state ,complement market providing the institutional framework, policy rules and regulations.-

Public policies has made a strong effort to solve social inequalities, based upon available financial resources and efficiency.

The current market –State mix ,has not been good enough to fullfill expectations of citizens, and to move away from copper dependency.

Chile is in the 33 th position up from last year, but 11 places below 2004-2005.

Strong institutional framework (28th),Corruption levels(25th), efficient government (21th(18th)), macroeconomic stability(22nd), markets competition (32nd) , openess to foreign trade (28th).-

The CGI suggest stagnation with the current competitiveness status. Education quality ranks 71st( 70th) , Mathematics and science ranks 99th(107th). Innovation investment (58th),Innovation capacity (63rd,(76th)).-

The report 2014-2015 ,suggest that Chile has to diversify its economy toward knowledge - based activities

Poverty rate (2011) 14,4% Literacy rate (20111) 98,9%Gyni Coefficient (2011) 0,52GDP (2012)(billions of US dollars) 266,3.

GDP (p/c) USD 15302Expenditures in education 2006-2012 :

Average Chilean disposal income is 60% that of OECDChile has 1 out 4 individuals in poverty , while OECD has 1

out of 10.1 out of 4 chileans do not have money to sustain their own

food, which out pass OECD (34 countries) average.Social expenditures in Chile is 10,2% of GDP , while

OECD is 21,9%.Women employment grew at a strong pace between 2007-

2012Gini coefficient : Chile 0,509- OECD 0,313Public health expenditures( p/c) Chile USD 1600-

OECD USD 3100

Economic perception outlook is not a positive one, even before the financial crisis of 2008. The downward trend has not changed lately.-

The Financial crisis, did not have a lasting effect, other than the expected.

There is a gap between Chile and its OCDE partners, concerning social indicators ( Education and health)

The chilean economy exports, still depends upon Mining sector. There is not strong share for manufactured sector

There is a gap bewteen expectations and reality concerning education and public health services

1.- Is the chilean economic model as a whole, a failure?

2.-Is the state keeping the pace with economic growth requirements?.

3.- Is it feasible an equilibrium between economic growth and lower inequality?

4.- Does the current reforms solve anything?

So far ,Chilean economy path, has not been enough to solve inequalities, to foster stronger manufactured goods for exporting, to improve the quality of services , and to boost regional economies potential.

It follows that the current status of chilean economic model, suggest it is necessary to do some rectifications to overcome the perception that it deals more with the management the allocation of better opportunities. among a few

The mix Market-State in the chilean economy, is moving toward more state than before, up to 20% of GDP.The proposed reforms are necessary but not sufficient, unless the state is also part of such reforms, to improve its effectiveness such that to get redistribution goals without weakening economic growth.-

The main dilemma is how to get better distribution outcomes without affecting growh. Thus.the proposed approach should also include a better state to imporve productivity.-

Chilean economy model ,faces a dilemma in terms of making possible the equilibrium between economic Growth and reducing inequality.

The state reforms have a lag concerning the timing for it. So far ,The state has failed to provide a better and wider approach to its complementary role for markets outcomes, in such a way to get stronger improvement in productivity and competitiveness

That equilbrium is feasible but considering the State reforms as relevant as the others ones.-