Wednesday
Jun242009
Chilean President Touts Chile’s Successful Economic Policies
By Celia Canon - Talk Radio News Service
During an address on Latin America and the economic crisis at the Brookings Institute yesterday, Chilean President Michelle Bachelet discussed her country's comparatively strong economy, explaining that the 1980’s economic crisis in Latin America taught the region to take measures to insulate itself from global financial crises.
“This time in Latin America, fundamental [institutions] were better and policy responses were swift,” Bachelet said. "Central banks move quickly to offset the lack of liquidity in dollars using either sovereign funds or international reserves accumulated during the commodity boom earlier this decade.”
Chile's current financial stability is largely due to the fact that it has moved away from American policies in recent years, eschewing the Washington Consensus, a set of American recommendations to Latin American states on how to rebuild their economies in 1989. The recommendations focused on maintaining a free market economy with little to no government involvement.
“This approach of no regulation is an approach that we have come to call in Chile the 'Paradigm of Passivity,' " Bachelet said. "The crisis has taught us what we should have known all along: that the state is not and cannot be passive when it comes to economic activity or financial regulation."
The Chilean president added: “When I talk about not being passive, I’m not talking necessarily about [an] interventionist state. I’m not calling for a government involved in all sectors of the economy or prone to over-regulating markets.”
Bachelet also compared Western states and Chile with regard to the policies implemented to reduce the impact of the global financial crisis.
“Unlike the U.S. and much of Europe, in 2009, tax payers have not have to pay the burden of bailing out” national companies, said Bachelet.
Additionally, the Chilean government has produced its own stimulus package, which aims to maintain the population’s purchasing power, rather than bail out industries.
“This [stimulus] package was designed to inject resources directly into the pockets of the most deprived families to promote employment by increasing public investment, and by granting subsidies to youth employment and to encourage private investment with temporary tax rebates,” Bachelet said.
Bachelet, a moderate socialist, is currently in Washington, D.C. to meet with President Barack Obama in hopes of increasing bilateral ties and improving trade partnerships. During her speech, she was quick to empathize with the Americans, echoing Obama's frequent calls for an economic restructuring to lead to “lasting prosperity."
States should not “go back to the same situation that we were in before, because that would mean we haven't learned the lessons of the crisis,” Bachelet said.
During an address on Latin America and the economic crisis at the Brookings Institute yesterday, Chilean President Michelle Bachelet discussed her country's comparatively strong economy, explaining that the 1980’s economic crisis in Latin America taught the region to take measures to insulate itself from global financial crises.
“This time in Latin America, fundamental [institutions] were better and policy responses were swift,” Bachelet said. "Central banks move quickly to offset the lack of liquidity in dollars using either sovereign funds or international reserves accumulated during the commodity boom earlier this decade.”
Chile's current financial stability is largely due to the fact that it has moved away from American policies in recent years, eschewing the Washington Consensus, a set of American recommendations to Latin American states on how to rebuild their economies in 1989. The recommendations focused on maintaining a free market economy with little to no government involvement.
“This approach of no regulation is an approach that we have come to call in Chile the 'Paradigm of Passivity,' " Bachelet said. "The crisis has taught us what we should have known all along: that the state is not and cannot be passive when it comes to economic activity or financial regulation."
The Chilean president added: “When I talk about not being passive, I’m not talking necessarily about [an] interventionist state. I’m not calling for a government involved in all sectors of the economy or prone to over-regulating markets.”
Bachelet also compared Western states and Chile with regard to the policies implemented to reduce the impact of the global financial crisis.
“Unlike the U.S. and much of Europe, in 2009, tax payers have not have to pay the burden of bailing out” national companies, said Bachelet.
Additionally, the Chilean government has produced its own stimulus package, which aims to maintain the population’s purchasing power, rather than bail out industries.
“This [stimulus] package was designed to inject resources directly into the pockets of the most deprived families to promote employment by increasing public investment, and by granting subsidies to youth employment and to encourage private investment with temporary tax rebates,” Bachelet said.
Bachelet, a moderate socialist, is currently in Washington, D.C. to meet with President Barack Obama in hopes of increasing bilateral ties and improving trade partnerships. During her speech, she was quick to empathize with the Americans, echoing Obama's frequent calls for an economic restructuring to lead to “lasting prosperity."
States should not “go back to the same situation that we were in before, because that would mean we haven't learned the lessons of the crisis,” Bachelet said.
tagged 
1980's economic crisis, Brookings Institution, Employment, FDI, Latin America, Michelle Bachelet, President Barack Obama, Washington Consensus, bail out, bilateral, central banks, chile, commodity boom, europe, foreign direct investment, global financial crisis, interventionism, lasting prosperity, national companies, paradigm of passivity, private investment, public investment, regulatory reform, socialist, stimulus package, subsidies, tax rebates, trade partnership in News/Commentary
1980's economic crisis, Brookings Institution, Employment, FDI, Latin America, Michelle Bachelet, President Barack Obama, Washington Consensus, bail out, bilateral, central banks, chile, commodity boom, europe, foreign direct investment, global financial crisis, interventionism, lasting prosperity, national companies, paradigm of passivity, private investment, public investment, regulatory reform, socialist, stimulus package, subsidies, tax rebates, trade partnership in News/Commentary
Former Defense Secretary Optimistic That U.S.-Russia Summit Will Produce Renewed Ties
As the U.S-Russia summit from July 6th-8th nears, former Secretary of Defense William Cohen, who spoke at the Center for American Progress Thursday, delivered an optimistic message on the chances of cooperation between the two nations based on goals that both share.
“The distrust is long, it’s deep, but in my opinion it’s not irresponsible... [President Obama] has to decide what the nature of our relationship is going to be with Russia. He has to identify 5 or 6 areas of potential cooperation,” said Cohen.
Russian political experts and Washington think-tanks alike believe the upcoming summit could produce a renewal in Russo-American ties.
Cohen and Dr. Samuel Charap, a Fellow at the Center for American Progress, identified six points of common interest between the U.S. and Russia: Arms control and non-proliferation of weapons of mass destruction, stability and security for the former Soviet region, the fight against violent extremism, the introduction of Russia to Western organizations such as the WTO, energy conservation, and the health and wellness of the two populations.
On the scheduled expiration of START, ratified by Russia and the United States in 1991 to achieve a dramatic reduction in strategic forces, Cohen said “If President Obama and his counterparts are dedicated to doing that [complete the renewal of START by the end of the year], it’s achievable.”
Cohen reiterated the importance of Russia’s role in foreign affairs, indicating that “the non proliferation of weapons of mass destruction: we both have interests in that; curbing Iranian and North Korean nuclear ambitions. Frankly I don’t really think we will be able to solve Iran’s ambitions for nuclear weapons capability without the help of Russia. Russia will have far more leverage than we will. The question is are they going to be wiling to exercise that leverage in their dealings with Iran. They have serious commercial interests in Iran...”
Charap agreed with Cohen that the U.S. should include Russia in international organizations.
“The administration's policies should be guided by the long term goal of integrating Russia into western and other international institutions. integration in these structures, rather than isolation from them is in the U.S national interest because they require greater accountability,” said Charap.
In addition to national security issues, Cohen also discussed economic benefits of renewed ties between the two nations.
“[Russians] need to have Western investment and it has not exactly been a hospitable environment for Western investment. There are serious questions remaining concerning the rule of law... and safe investment,” said Cohen, adding that “The U.S should encourage the development of a democratic Russia that observes the universal values of human rights, political pluralism and the rule of law” in order to encourage foreign direct investment.