Insulza Says He Is the Man to Restore Chilean Business Sentiment

  • Presidential contender commented in interview in Santiago
  • Business confidence has fallen to levels last seen in 2009

Chilean presidential contender Jose Miguel Insulza says he’s the man to restore good relations with the business community and revive growth, after conflicts with the current government undermined confidence and investment.

As Interior Minister from 2000 to 2005, Insulza says he used to meet with company executives once a week to ensure working relations and maintain business confidence. The effort paid off as investment picked up and growth rebounded from the recession triggered by the Asian crisis, he said.

"We can repair the current relationship with the business community," Insulza said in an interview this week. "I have a great relationship with them."

Weak business sentiment has been a thorn in the side of the current administration of President Michelle Bachelet, falling to levels last seen during the global financial crisis of 2009. Persistent assurances that the government is focusing on growth have failed to reassure the business community angered by higher taxes and the empowerment of labor unions. As a result, investment has been flat or falling for three years.

Insulza warned all members of the cabinet must remain on message at all times to reassure business leaders that the government is dedicated to reviving growth after the slowest three years of expansion since the early 1980s.

Jose Miguel Insulza

Photographer: Jim Watson/AFP/Getty Images

In 2015, Bachelet became the first Chilean president in more than 25 years to fire her finance minister, Alberto Arenas. Corporate leaders had consistently attacked Arenas for failing to consult with them enough over an $8.2 billion tax increase implemented the year before.

Insulza, a member of the Socialist Party, said that under his government the business community wouldn’t have to worry about further tax increases, even as social demand mount. The required level of trust and cooperation simply isn’t in place.

"Wealth distribution continues to be very unfair and wasn’t corrected by the tax reform, but you can’t do another reform just two years after the last one," Insulza said. "A tax reform requires a lot of confidence from people that isn’t there today."

Insulza, a former Secretary General of the Organization of American States, is competing against former President Ricardo Lagos to become the Socialist Party candidate in primaries for the ruling coalition. For now, both are trailing far behind Alejandro Guillier, a member of the Radical Party.

    Before it's here, it's on the Bloomberg Terminal.