Promoter freedom and democracy in Chile

Impacto de Economía y Sociedad

Promoter of Freedom and Democracy in Chile

(Presentation by economist José Luis Daza of José Piñera, as keynote speaker at the Annual Dinner of the North-American Chamber of Commerce, Drake Hotel, New York, February 19, 2004)

It is not the first time that I introduce José; on previous occasions it has usually meant an enormous effort followed by great pleasure. In order to get this man to speak in forums I had organized, I had to pursue him all over the world. Fortunately, this time the Chamber exerted the effort in getting him to speak to us tonight, and I am keeping the pleasure.

As always, I have an enormous sense of excitement at the prospect of listening to José, for, every single time I have been with him, heard him or read him I have learnt something new. As I said a year ago, when the Chamber graciously invited me to be the keynote speaker, José has profoundly influenced my thinking.

When we are young, I believe most of us dream of having an opportunity to leave a positive mark on the world, we all dream of having a chance to make the world a better place. Some people achieve it through ideas, others through actions in the policy arena, and others through the influence they exert in their daily human interaction.

Well, José has impacted the world, through every one of these avenues. But today I would like to highlight what is perhaps his greatest contribution of all; something that is not sufficiently mentioned: his contribution to democracy, to freedom.

I am sure you are all aware of his role as “the father” of Chile’s spectacularly successful pension fund system; of his role as the author of the mining code which led to Chile’s quadrupling of copper output since the early 1980s (by the way, almost all of this increase carried out by the private sector). Of his role in reforming the labor market. I am also sure you are aware of his role as advisor to governments all over the world, from the USA to Russia, from China to Mexico, etc, etc.

Unfortunately, his advice was not always followed. I remember an episode in September of 2001; just three months before Argentina’s massive default. Finance Minister Domingo Cavallo was addressing a group of about two hundred investors in Bariloche. All of a sudden he noticed that Jose was in the audience. He stopped reading, he looked up and said “ I see José Piñera in the audience; José, if we had only followed your advice we wouldn’t be in the mess we are in now”. He looked down and continued reading; we all know the ending of that story.

However, tonight I would like to recognize José's efforts in one front which is not mentioned sufficiently. His role in helping establish a solid, stable democracy in Chile.

Last year I said that I believed that, from its foundations, Latin America evolved in a perverse universe, in a perverse political and economic equilibrium where poorly designed institutions and bad economic policies led to bad economic outcomes, which in turn created the conditions for populist demagogues, which in turn led to poor economic results, and on and on and on.

I also mentioned that Chile was the only country in the region had been able to break away from this perverse equilibrium, to a new virtuous, political and economic equilibrium. The negative shocks that have hit Chile’s economy and political system over the last few years have prompted a benign, positive response by the key players, and its democracy has been strengthened. There is no doubt that individuals deserve great credit for these actions, but there is also no doubt that all incentives were in the right direction.

I honestly believe that the seeds for these responses where planted in the late 1970s and 1980s by a group of idealistic individuals who implemented revolutionary reforms that led to the creation of the institutions essential for democracy.

Their ultimate motive was the promotion of individual freedom, in all its spheres. José was a vocal defender of freedom of the press and of human rights at all times.

José was one of those individuals who played a critical role creating the institutions that have been the basis for the best functioning democracy in Chile’s history.

So José, while everyone admires you for your role in the economy, I thank you for your role in helping make Chile, if not the only one, one of the few functioning, stable democracies in Latin America.