Friday, June 07, 2013

Chilean economy Model : Between skepticism and doubts(II)

In the last thirty years the State in Chile ,has changed its profile to become a complement with the private sector. It has done a magnificent job working to widening domestic market , throughout Free trade agreements (more than 60, with equivalent number of countries). It has improved the availability of public infrastructure, throughout private sector participation to build up high ways, hospitals. and other public infrastructure facilities. But it does not have yet a new identity, such as to make it the reference of last resort so to speak, for private sector and the economy as a whole. This lack of identity have some implications. Let take some few examples: a.- In the public health sector, the State do not pay its suppliers promptly. It delays payment by 120-140 days. So, the private sector do not have a clear policy of paying its suppliers promptly either .In fact it also takes more than 4 months b.- Concerning the labor relations issues. Public employees, do not have the right to negotiate or access to ruled negotiations(arbitration included), and wages are not linked to performance. Civil servants are not considered to be relevant in the achievement of competitiveness. So, the private sector, do not use negotiations the way it should ,and do not consider labor unions as strategic partners. The Chilean economy as a whole in this case lose competitive edge. c.- The quality standard for all of the State´s services do not match expectations. The consumer protection laws, are far from being effective when it comes to deal with the services the State provides. For instance, in public health hospital, people in needs, must wait for 12 hours in the emergency room before getting a bed for treatment. On the other side ,the reform for the judiciary system in the year 2003,asked for more than 1200 public attorney, but no more than (roughly)700 were finally approved.. d.- Thus, the state do not have a Social Responsibility Code to sustain its actions. So, it is not a reference for wider Social responsibility codes on the private sector.- How did this adjustment lag happened?: It seems that there is a lack of understanding about the complexities of economic development within the framework of globalization and glocalization, the wider scope and impact of the social networks , and how it influences the State role ,the community involvement, the relevance of strong local government and better focused social policies. Within the globalization framework, the State is a service provider and as such, it is a competitiveness factor. What about the “new identity” of the State?.In the XX century the State was considered as the brain for social development, citizenships and nationality. It was the driven forces for better democracies, education and self esteem. However, these days those paradigms, are no longer self reinforced. Thus ,the issue is not for more State, but for better State. Besides, this does not mean a weaker State.- Actually the world is connected throughout trade networks of goods and financial capital flows. Cultural diversity creates new links for citizenships, other than conventional and national values. Social networks also support new ways of engagement between people, and their authorities. Democracy works more in real time, (not every four or five years), and demands need to be solved quicker than before. So, trade networks, cultural diversity, and social networks create global citizenships. Therefore, the new identity of the Sate arise from the fact that it is not longer the brain of society, and it depends upon a better connection with the people needs than before. The Community needs a friendlier State, capable of being both the articulator and the coordinator between markets and firms, between growth and development. People want the State to be a good service provider, a guarantee for the rule of law and local institutions, a competitiveness factor, and a facilitator not an obstacle for people achievements. The Chilean model might not be at its final hour yet, as long as it still has space for improvements. That it is the pending task for the coming years.