business Chile - AmCham Chile · AmChAm GlobAl SponSorS 2013. business Chile December 2013 5 the...

business ChileThe voiCe of The Chilean-ameriCan Chamber of CommerCe n°292, DeCember 2013

ElEction 2013The Green ballot

tradE tEstimonialenseña Chile

spEcial rEportGeneration Y in Chile

usa: open for business

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December 2013 3business Chile www.businesschile.cl

Contents

Teach for Chilenon-profit organization Enseña chile selects and trains chilean university graduates to teach for two years in some of the country’s poorest schools.

TRADE TESTIMONIAL

14The united states: open for businessthe Us government’s selectUsa initiative offers personalized assistance and information for chilean companies looking to invest in the Us.

COvER STORy

6

8 ELECTION 2013

The Green ballota reform in chile that allows regional councilors (corEs) to be directly elected is meant to promote decentralization, but the results are inconclusive.

22Generation Y in Chile: What do millennials Want?Experts say that figuring out what millennials want, such as the opportunity to make a difference, is key to keeping them motivated in the workplace.

SpECIAL REpORT

EDITORIAL BOARDCo-Chair, Michael Combes, Marco Chilena; Co-Chair, Karen Poniachik, British American Tobacco Chile; Vice-Chair, Manuel José Vial, Grupo Vial Abogados; Vice-Chair, Ruth Bradley, Freelance Journalist, General Editor, Julian Dowling, AmCham Chile; Assistant Editor, Mariana Ossa, AmCham Chile

MEMBERSKathleen Barclay, President AmCham Chile, Roberto Matus, General Manager AmCham Chile, Gonzalo Iglesias, IC Packaging; Ari Bermann, 3M Chile; Pelayo Bezanilla, Coca-Cola de Chile; John Byrne, Boyden Consultores Chile; Paulina Dellafiori, AmCham Chile; John P. Dill, Project Management; Francisco Garcés, Banco de Chile; Ricardo Inostroza, AES Gener; Olga Kliwadenko, K&D Comunicaciones; Gideon Long, BBC/The Economist; Vincent McCord, Asesorías e Inversiones CarCon; James Newbold, Tanager Investment; Roberto Ossandón, Ossandón Abogados

PRODucTIOnK & D Comunicaciones Ltda. Olga Kliwadenko, General Manager, 11 de Septiembre 1945 - Of. 516, Providencia. Phone: 376 9877, Cell: (09) 6601-5505; e-mail: [email protected] www.kyd.cl

Special RepoRt

Generation Y in chile: What do Millennials Want?Millennials, aged between 20 and 35, tend to be adaptable and optimistic but they are also technology-dependent and impatient, which can be a challenge for traditional businesses.

Rock onlike his idol Bruce Springsteen, Santiago eneldo plans to keep on rocking until the end.

© 2013 AMchAM chILEReproduction in whole or in part is strictly forbidden without permission from the publisher. Opinions expressed in bUSiness CHILE are those of the authors and do not necessarily reflect those of AmCham or bUSiness CHILE. We accept no responsibility for the accuracy of the articles and any unforeseen errors. bUSiness CHILE is published monthly, 10 months a year and mailed free of charge to AmCham members. Letters are welcome. They should be accompanied by the author's name and daytime telephone and sent to [email protected] For reasons of space limitation, AmCham reserves the right to edit letters published.Advertising inquiries should be addressed to AmCham's Sales Department: Paulina Dellafiori: E-mail: [email protected]; Phone:2909741. Fax 2120515 Av. Presidente Kennedy 5735, Torre Poniente, Of.201, Las Condes, Santiago de Chile; E-mail: [email protected]; www.amchamchile.cl; www.businesschile.cl

life in the SloW lane

14

22

business ChileThe voiCe of The Chilean-ameriCan Chamber of CommerCe n°292, DeCember 2013

ElEction 2013The Green ballot

tradE tEstimonialenseña Chile

spEcial rEportGeneration Y in Chile

usa: open for business

The United States: Open for BusinessPresident Obama has launched a new program to support foreign investors from Chile and other countries, but are Chilean companies taking advantage?

46

44Promoting Chile abroadroberto Walker, president of latin america for principal international, talks to bUsiness cHilE about chile day and the post-election economic outlook.

INTERvIEw

40facing Chile’s energy Challengesthe chile-massachusetts Energy Forum, which was held in Boston recently, aimed to address the challenges of the energy industry in chile.

28Good Corporate Citizensamcham’s annual Good corporate citizenship awards help to promote successful corporate social responsibility initiatives in chile.

SpOTLIghT

AMChAM SpECIAL

The articles in this magazine are also available in Spanish at www.businesschile.cl

www.businesschile.cl December 20134 business Chile

AmChAm GlobAl SponSorS 2013


the door to the United states has been open to chilean companies since the signing of the Free trade agreement between the two countries a decade ago. in addition to promoting trade, this landmark agreement signed in 2003 facilitates investment between the two countries. But, until recently, most of the investment has flowed one way – from the United states into chile. increasingly, however, chilean companies are finding opportunities to invest in the United states.

chilean companies looking to expand internationally have traditionally invested in latin american countries where the culture and markets are familiar. But the United states offers an opportunity to invest in a huge and diverse market. not only has the global financial crisis of 2008 generated potentially good deals, but faced with rising competition from other countries the Us government is also working harder than ever to attract foreign investment.

this month’s cover story reports on president obama’s selectUsa initiative, which, as the name implies, aims to convince foreign investors to “select” the United states. in october, the first ever selectUsa investment summit was held in Washington, dc, with businesspeople from around the globe. amcham chile president Kathleen Barclay and General manager roberto matus also attended. it was hosted by president obama and included speeches by senior officials of the Us government, as well as by executives from the private sector including companies such as dow chemical, Walmart, and Bloomberg.

they discussed why the Us economy could be attractive to investors, including its size, infrastructure, number of trade agreements, and a trained and educated workforce. the straightforward legal system, political stability, and declining cost of energy in the Us completed the picture. all of the above, explained the speakers, make for a highly productive work force.

the message was loud and clear: “the Us is open for business”.

Historically, the promotion of foreign investment in the United states has been left to individual states. since there are 50 of them, each with unique characteristics, rules and incentives, this can be intimidating for investors. But now, as our cover story explains, the federal government is establishing a single window in Us embassies that will be charged with handling enquiries relating to foreign investment. crucially, especially for small chilean companies, it gives investors a centralized point of contact to obtain advice and information.

as part of its mission, amcham has always supported Us companies looking to set up operations in chile. a challenge for the chamber in the future is to work with the Us Embassy to support chilean companies interested in setting up operations in the United states. doing business there is not easy – Us consumers can be demanding – but with so much help available, there is no excuse not to explore the opportunities.

Finally, bUsiness chile and the amcham staff would like to take this opportunity to wish all our readers, and all amcham members, a happy and prosperous new Year.

Selecting the USA

Editorial

boArD oF DIrECTorS eXeCuTive CommiTTee PresidentKathleen C. barclay asesorías KCb ltda.

Vice President: Carolina valdivieso, Kimberly Clark Chile

secretary of the BoardPablo achurra, aramark

treasurersandra Guazotti, oracle Chile

Past PresidentJavier irarrázaval, The Walt Disney Company Chile

directors

Pamela Camus, american airlines

felipe Cerón, aes Gener

fernando fischmann, Crystal lagoons

michael Grasty, Grasty, Quintana, majlis y Cía.

sandra miró, Dhl Chile

Karen Poniachik, british american Tobacco Chile

ellen lenny-Pessagno (ex-officio)

adVisory council

alfredo ergas, inbest Chile

arturo fermandois, fermandois evans y Cía.

Gonzalo iglesias, iC Packaging

rodrigo Álvarez, Principal financial

amcham Mision statement“Promote free trade and business between Chile and the United States"


omás recart never expected to be working in the education field. When he was studying engineering at the catholic University of chile more

than a decade ago he wanted to learn by doing. But today he is Executive director of Enseña chile, a santiago-based organization that recruits graduates from chilean universities to teach for two years at schools in low-income neighborhoods.

recart caught the education “virus” as he calls it in 2002. a 24-year old graduate student, he was working on a software

program to improve attendance at schools in puente alto, one of the poorest areas of santiago. “You could smell the no hope,” he says. “i started to feel a big sense of urgency in my stomach.”

He discovered that relatively minor changes could make a big difference in struggling schools like those in puente alto. “my sense of possibility grew even larger, there are so many things to change but every single thing has a solution.”

a few years later, further motivated by chile’s student-led penguin revolution in 2006, he enrolled at the Harvard Kennedy school of Government. there he met Wendy Kopp, the founder of teach For america (tFa), an organization that places Us graduates in low-income schools.

Her vision immediately impressed him. “she said when the system is broken don’t try to solve the problem yourself, concentrate on building a bridge between the most talented people in your country and the biggest problem in your country.”

He found out from former classmates that he wasn’t the only one interested in bringing teach For america’s model to chile and so they met in new York to start work on a proposal.

in 2008, recart and his colleagues founded Enseña chile and joined the global teach for

all network launched by tFa and teach First, which now includes 30 countries. in august that year Enseña chile started receiving applications.

“in two months we had 326 applicants and we selected 40 of which 29 accepted,” he said. since then the number of applicants has risen and this year Enseña chile placed 136 teachers in 69 schools in the araucanía, los ríos, Valparaiso and santiago metropolitan regions. over 20,000 students have benefitted.

Enseña chile gets 20% of its budget from the ministry of Education and the rest comes from individual and corporate donations, including 70% from five strategic partners – Bci, Entel, anglo american, Empresas copec and the non-profit education nGo Fundación mustakis. these partners also help with strategy and give management advice, said recart.

a third of the budget is spent on recruitment, mainly in the top six universities in the country. Engineering departments are especially targeted, he said, because the biggest lack in chilean schools is in math, science and English.

the rigorous selection process includes essays followed by one-on-one interviews to weed out those who don’t make the cut. only one out of ten make it past

teach for chileThe non-profit organization enseña Chile, which is part of the Teach

for all global network, aims to be a catalyst for change in Chile’s

education system.

tBy Julian Dowling

TrADE TESTImonIAl

Tomás Recart, Executive Director of Enseña Chile


this stage.tomás rivadeneira is an alumnus

from the 2010-2011 cohort. after studying engineering at the catholic University he decided to apply because he wanted to work in something where he could “make a difference”, he said. He also wanted to know firsthand about chile’s education system.

“For me it was very valuable to share two years every day with students, many of them in a situation of vulnerability, to realize their problems and those of their teachers,” he said.

Enseña chile’s teachers receive one month of training before stepping into the classroom and continue training on weekends during the program. “the training is good, but it is never enough for the reality that you face,” said rivadeneira.

a criticism of teach for america has been the lack of training compared to fulltime teachers. But recart said that those selected in chile already have the skills to teach and they hone those skills in the classroom. “We believe that good training has to include classroom experience.”

the pay is not a big draw. successful candidates pocket 400,000 pesos (some Us$800) a month, which is about a third of what they could earn starting out in professions like engineering. But money isn’t everything.

“they understand this is something they won’t get doing Excel spreadsheets and powerpoints,” said recart.

Enseña chile also gives its teachers feedback and measures their students’ performance, which is something education faculties in chile do not do. “some people say anyone can teach but that’s Julian Dowling is Editor of Business CHILE

chilebUSiness

not true,” he said. and the demand for teachers

is huge. last year 35 schools that requested teachers didn’t get them. priority is given to schools that have already participated and that have students from low-income families, explained recart.

many teachers catch the education bug. recart says 75% of alumni continue to work fulltime in education either teaching, as social entrepreneurs or in the government. another 12% go on to graduate school, 5% work in companies and the rest start businesses or work in nGos not related to education.

“We don’t want them all to be teachers, we need people from all walks of life,” he said.

it is early days still, but recart says Enseña chile should be judged by the impact of its alumni. rivadeneira, for example, now works in finance at larraín Vial but is involved in the community, responsibility, teamwork and Excellence initiative (crEE by its spanish initials) that aims to create a network of “schools of Excellence”

in poor areas of the country.in the future recart hopes to

learn from the other countries in the teach for all network, such as china and india, and make the program more diversified. But he admits he has run into the same problem Enseña chile is trying to solve – the best teacher candidates are from universities where the students tend to come from privileged backgrounds.

as for the current debate about education in chile, recart says the focus is misplaced. instead of discussing how to finance access, politicians should be talking about quality, he said.

How schools are financed, whether with private or public resources, does not necessarily determine the quality of teaching in their classrooms. “private or public, there is no silver bullet here,” he said. But putting bright young minds in the classroom is a start.

Enseña Chile alumni and staff at the eCh Seminar in 2012


n november 17, the idea was to represent the chilean electorate better than ever. the polls got more colorful, debuting

a new green ballot alongside the standard white, blue and beige hues for the presidential and congressional tickets. the ballot allowed voters to choose, for the first time ever, their local representatives known as Consejeros Regionales (corEs), or regional councilors, who are responsible for, among other things, deciding how tax revenues are spent in their communities.

“this is the most important change regarding decentralization in 20 years,” said miguel Flores, the interior ministry’s Undersecretary for regional development.

Following chile’s return to democracy in 1990, regional councils were created to decentral ize governance. these are chaired by a regional governor, or Intendente, who is appointed by the president. the councilors, who until this year were appointed by municipal councilors, or Concejales, are responsible for approving projects such as sewage systems, street lighting, road repairs and cultural activities. Yet few chileans know who they are.

But that is changing. the government of president

sebastián piñera backed a non-partisan push to modify the system of representation amid demands for greater regional investment. in June,president piñera made good on a campaign promise by signing a law that empowers citizens to elect the corEs directly. the trial run for the new system was the november election.

“What decentralization seeks to do is ensure that decisions are made as close to the source of the issue as possible,” said Flores.

Based on a new method of divvying electoral districts, 278 councilors will represent chile’s 15 regions. Each region is comprised of up to eight provinces, each of which is guaranteed at least two representatives. the size of a region’s population determines how many councilors it will elect. regions with over 4 million inhabitants, such as the santiago metropolitan region, have larger regional councils made up of 34

corEs and highly populated provinces can have more than two representatives. chile’s smallest regions, by contrast, will rely on 14 councilors to represent up to 400,000 inhabitants.

councilors are elected for a four-year term and can be reelected. their tasks include deciding how to spend money received from the national Fund for regional development (Fndr), monitoring the actions of the governor, and approving regional development strategies.

regional spending

in 2014, the regional councils will manage about Us$2.2 billion in funding, up from Us$1.6 billion in 2012, an increase that Flores lauds as historic. But critics complain the amount is a measly slice of total national spending.

the portion of annual public investment for which the regions were responsible averaged just 13% in the last decade. But the

a new system that allows voters to directly elect regional Councilors (Cores) in Chile is meant to decentralize decisions regarding public spending, but after the first trial run in november critics say the reform does not go far enough.

oBy Kalynne Dakin

ElECTIon 2013

the Green Ballot

the Green Ballot

Una plataforma web que te ayuda a administrar :

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chile, in particular, and these institutions were very centralist.”

if latin american development is characterized by urban growth, chile can call itself traditional. resources tend to concentrate in santiago, which is home to around a third of the country’s population.

national economic indicators suggest that chileans are making globally competitive wages, demolishing poverty, making gains in education and keeping pace with many standards of the organization for Economic cooperation and development (oEcd), which chile joined in 2010.

However, many of these scores do not reflect the living standard in regions beyond santiago.

daniel sandoval, who was elected as a corE representing the party for democracy (ppd), said the view from the araucanía region in southern chile is quite different. some of the former senate adviser’s main

concerns are for constituents who lack access to clean water and basic education.

“the regional councils respond to political parties and not to the citizen,” sandoval said. “regional development is a farce — it isn’t bound to the interests of this region, but to other interests that don’t serve us.”

residents in the region, which is known for its strong mapuche heritage, have taken to the streets to demand greater sovereignty on a regular basis.

“since 1993, there has been a failure of understanding by the regional councils concerning [the indigenous population’s] main territorial demands,” said sandoval.

For the araucanía, decentralization could mean more funding for cultural preservation.

“this is a very significant vote for local and regional development, but unfortunately we see that there isn’t any effort to try to inform citizens,” said sandoval.

ElECTIon 2013level of investment overseen by the regions has been on the rise since president piñera took office in the aftermath of the 2010 earthquake, which required considerable funds for reconstruction. Even so, the central government has reserved the right to make the better portion of public spending decisions.

“there are people who say that even if the government offers more resources to the regions, they don’t have the professionals nor adequate management capacity to do good projects and spend in an efficient manner,” said Jorge rodríguez, a public policy analyst at santiago think-tank ciEplan.

But he said that without more money and responsibility they will not be able to develop that capacity. “it’s a vicious circle, and both aspects must be addressed at once,” said rodríguez.

He does not interpret the recent increase in spending during the piñera government to a change in heart. “decentralization happens by sharing power,” he said. “Basically, those who have the power don’t want to share.”

rodríguez would like to see the state raise the regional share to 30% of the budget within the new councilors’ first term.

“as a country, we have the rather sizable challenge to decentralize, and democratically electing the regional councilors is a step forward,” he said. “But you have to take a broad and integral approach.”

spanish influence

al though ch i le recent ly ce lebrated 200 years o f independence f rom spain, colonial influence has not entirely retreated from the continent.

“chile is a centralized country, culturally speaking,” said Flores. “spanish institutions extended throughout latin america and

Jorge rodríguez, ciEplan

“Citizens demand further development of their regions but they don’t necessarily understand how to achieve it.”

miguel flores, Undersecretary for regional development

“We are increasing the importance of regional councilors and the governor as authorities capable of resolving a larger quantity of problems than they do today.”

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Kalynne Dakin is a freelance journalist formerly based in Santiago and currently working in Washington, DC.

chilebUSiness

What’s a Core?

the government’s campaign, with the slogan “decentralization starts with you”, employed famous faces to ensure that voters knew about the change. But the green ballot attracted little attention before the election.

“i don’t think most people know that the corEs exist,” said patricio navia, a chilean professor of political science at new York University. “my suspicion is that people don’t feel represented by them.”

new representation did not necessarily mean fresh faces. many of the candidates had held government office in the past, and the government estimated that 40% of candidates had previously participated on a regional council.

Until a decade ago, local mayors had an important say in the composition of regional councils because of the way municipal councilors were elected. But, in 2004, an electoral reform created a separate ballot for councilors, and meant that corEs with different loyalties

could be appointed. But it was still the old party machine at work, said navia.

“For the most part, corEs have been party insiders, people who build a political career within the party,” navia said, adding that old standards allowed councilors to also hold paid government positions.

in the first respect there won’t be much change, he said. like the presidential candidates, who had an uncompromised hold on the media spotlight this year, many of the corE hopefuls aligned themselves with established national parties.

“the parties now control the nomination process and people will mostly vote for party affiliation at the corE level,” navia said. in addition, the main regional authorities, the intendentes, will still be appointed by the central government, he added.

considering the dearth of information ahead of Election day, other experts agreed that voters might simply select the corE candidate affiliated with their party.

Daniel sandoval, corE-elect in the araucanía region

“regional development is a farce. it isn’t bound to the interests of this region, but to other interests that don’t serve us.”

Patricio navia, new York University

“The election of Cores will not directly address the issue of economic underdevelopment.”

future challenges

in the event, and despite having nearly 1,400 corE candidates to choose from at a national level, preliminary election results showed that chileans voted mainly along party lines.

according to chile’s Electoral service (servel), 17 of the councilors elected did not represent either of chile’s two main political coalitions: the alianza or nueva mayoría, which won 103 and 156 corE seats, respectively. they represent smaller coalitions such as todos a la moneda and si tú Quieres, chile cambia, led by former presidential candidates marcel claude and marco Enríquez-ominami, respectively.

Unless congress loosens its grip on the regions, however, rodríguez is not convinced that the corE elections are such a “radical” leap toward greater decentralization.

“the question is, what new functions, resources, responsibilities should [the corEs] have,” he said.

But at the very least, chilean democracy evidently matured this year. the hope is that in the future people will better understand the function of corEs and why it is so important to monitor how they spend the region’s limited resources, said Flores.

santiago may be chile’s economic pulse — pumping out nearly half the country’s annual Gdp — but investment potential spans from tip to tip of the diverse landscape.

“chile will never be a developed country if it doesn’t increase its level of decentralization,” said Flores.

ElECTIon 2013


COVER STorY

the united states:

open for BusinessThe united states is making a concerted effort to attract foreign

investment and for Chilean companies there has never been a

better time to invest in the world’s biggest economy, but planning

is key to success in this diverse and competitive market.

merica is open for business. that was the message president obama hammered home at the first-ever

selectUsa investment summit held for two days in Washington,

dc, in october. speaking to more than 1,200 executives gathered from nearly 60 countries, including chile, president obama pitched the opportunities and benefits of investing in the United states.

“i believe there is no better place

in the world to do business than the United states of america,” he said. “We are open for business and we’re looking forward to partnering with you.”

the United states has by far the largest stock of Foreign direct

aBy Julian Dowling

president Barack obama at the selectUsa 2013 investment summit

COVER STorY


COVER STorY

investment (Fdi) in the world, but its share of Fdi inflow has fallen in the last few years as other countries, including china, have become more competitive. at the same time, the Us economy is recovering slowly from the 2008 financial crisis and has narrowly avoided a double dip recession. in this scenario, the government hopes foreign investment will generate jobs and boost exports.

But investors need to be wooed. selectUsa is an initiative created by the obama administration in 2011 to promote the Us as an investment destination. the program gives businesses a single point of contact in the federal government to cut through red tape. in addition,

obama has called on Us embassies around the world, including in chile, to support companies with information and counseling regarding investment opportunities in the Us.

that is welcome news for chilean companies that can be intimidated by the size and sophistication of the Us market. “this is a very serious all-out effort, it is not just another speech,” said roberto matus, amcham chile’s General manager, who attended selectUsa along with amcham president Kathleen Barclay.

the high level of speakers at the event, including Us secretary of state John Kerry, shows there is a “new way of thinking” in the

miguel Pérez, Eclac

“The general panorama is growth in foreign investment by Chilean companies, but almost all of it has been in latin america.”

roxanna orellana, romatech

“We are dying to take this next step into the us market. america is a great country and this is a dream come true.”

Us government regarding foreign investment, said matus.

one chilean company that participated in selectUsa was energy efficiency firm romatech. “For us it was the opportunity of a lifetime, it was a complete success,” said roxanna orellana, international sales manager at the santiago-based company.

the company, which produces a power-metering device at its plant in cerrillos near santiago, is looking to open a plant in the Us that will produce the device for the Us market. “the chilean market is small and we need to expand,” said orellana. “chile has 16 million people, the Us has 300 million.”

But first it needs to decide which state. Forty-two states were represented at the selectUsa meeting, each with their own stand. orellana visited the booths of california, Florida and new York among others. all of them offer different incentives, she said, but she was particularly impressed by texas. “Every state works differently, you have to pick a state according to your needs,” she said.

after comparing the incentives, she said texas offers cheaper living and labor costs than new York, and is also a “high tech state” with many of the country’s top universities. another advantage is that it is a “latino” state, she said. although fluent in English, she admitted she is more comfortable doing business in a state where she can work with other latinos.

romatech’s first move will be to partner with a university in texas that will certify its metering device according to Us norms, and convert it to the 110-volt system from chile’s 220-volt system. then it can be patented, produced and sold. “produce a product in america to sell to

america, that’s the idea,” she said.

The unchartered frontier

For romatech, the ease of doing business and reliability of the Us market are key factors in its decision to expand there. “We like things to work, that’s the american way,” said orellana.

But there are other more concrete advantages of doing business in the United states, including low energy costs, competitive labor costs and relatively high productivity, said Ellen lenny-passagno, senior commercial officer at the Us Embassy in chile.

“the Us is the unchartered frontier for chilean companies, they are underweighted in terms of their investment in the Us,” she said. “now is the perfect time for them to be looking at the Us.”

as a result of the shale gas boom in the last decade, energy costs have fallen and the Us now produces more than half of its energy supplies domestically. that is at least part of the reason foreign manufacturers like siemens are increasingly exporting products from the Us. “many companies find it very cost effective,” said lenny-passagno.

the Us also offers respect for the rule of law and protection for intellectual property, she said. “We’ve seen a number of chilean companies open offices in the Us in order to take advantage of intellectual property protection.”

one of these is crystal lagoons, which recently opened its global head office in miami. “the decision is due chiefly to the extraordinary potential that the Us market represents for our technology,” said Kevin morgan, cEo of crystal lagoons Usa.

crystal lagoons recently announced its first project in the Us – a real estate development in Florida called tradition. after the 2008 financial crisis and bursting of the housing bubble, the Us real estate industry is starting to pick up again, said morgan.

“trust has begun to be restored and today the development of the real estate industry is regaining momentum,” he said.

latin american advantage

chilean investment in the Us, which reached Us$552 million in 2012 according to the

COVER STorYEconomic relations department (direcon) of chile’s Foreign affairs ministry, is a drop in the bucket of overall Fdi in the Us, but it has been growing steadily since 2008.

in addition to mining and real estate, chilean companies have seized opportunities in viticulture and forestry: concha y toro acquired california winery Fetzer in 2011 and arauco bought a particleboard plant in north carolina last year. the latest to the party is chilean bank Bci, which earlier this year agreed to buy city national Bank of Florida from its spanish owners for nearly Us$900 million. that deal is expected to close in the coming months.

in all these cases, companies that already had operations in the Us jumped at the opportunity to expand their presence in this market. But they have done so mainly as an extension of their international strategy rather

than to replicate their successful business model in the Us, said miguel pérez, an economist at the Un’s Economic commission for latin america and the caribbean (Eclac).

Foreign direct investment by chilean firms has increased in the last decade as they have outgrown the relatively small domestic market. their financial capacity, partly fuelled by private pension funds in chile and strong Fdi inflow, has also enabled more companies to invest abroad. and, since Fdi tends to be countercyclical, recent global economic turmoil has created investment opportunities.

But most of the investment to date has gone to chile’s neighbors. in 2012 chilean companies invested a record Us$8.55 billion abroad, according to direcon, up from nearly Us$5 billion in 2009. of this, companies spent Us$5.32 billion in colombia – the

top target of chilean investors in the region, particularly in the retail and banking sectors - and Us$916 million in Brazil.

chilean investment in the Us is expected to keep growing, but this trend is relatively recent: investment in latin america represented 85.5% of total chilean Fdi in the period 1990-2012, while investment in north america was only 7.5%.

a 2011 Eclac snapshot of chile’s 20 largest multinationals outside the financial sector shows that they are concentrated in neighboring countries and in only a few sectors. in fact, 63% of foreign assets were concentrated in just two sectors: retail and forestry. transport had 10% and food and beverages 7%.

Even though there has been some expansion recently beyond latin america, the fact that most investment to date has been in argentina, peru, Brazil, and

increasingly colombia, is a sign that companies are seeking markets similar to chile’s, said pérez.

“they are looking for similar markets to repeat the formula that has been successful in chile,” he said. “this might be in peru, argentina, colombia and maybe mexico, but not in the Us.”

although the Us offers advantages for chi lean companies, including a large Hispanic population, there are several important challenges that they must overcome, said pérez. these include the size of the market, with the demand and logistical challenges that implies, as well as the level of sophistication of Us consumers and the different market conditions.

“chilean firms like Falabella and cencosud are market leaders in colombia and peru, but they wouldn’t be in the Us,” he said.

Diversification strategy

some chilean firms, like those mentioned above, have done well within latin america, but too much concentration in the region could spell disaster. a slowdown in china, for example, could hurt chilean investments not just in chile but also in other latin american countries.

“if and when the chilean economy decelerates, the other markets they’re in will be experiencing the same pattern,” said lenny-passagno. “it would be a logical next step for chilean companies to look at the Us market and a great diversification strategy.”

pérez agrees. He said that the advantage of diversification is protection against a fall in demand in certain markets. the Us is also a market that welcomes innovation in niche products and services. “the idea is to be less

linked to the macroeconomic cycles of latin america,” he said.

other countries have adopted this approach in the past. spanish companies, which invested heavily in latin america in the 1990s before starting to invest in the Us about seven years ago, have shown this strategy works, said lenny-passagno.

“i see a lot of similarities in the way spanish and chilean multinationals have approached foreign investment,” she said.

diversification also means diversifying within the Us. chilean investment has traditionally been concentrated in the states of Florida and california. For chilean start-ups in particular, silicon Valley is the gateway to venture capital and support for technological innovation. chilean real estate firms, meanwhile, have raised skyscrapers in miami, which is also a destination and cargo hub of lan airlines.

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But companies like romatech are showing that there are also opportunities in states like texas.

chilean companies are not the only ones that have sensed an opportunity. multinationals from other latin american countries are also moving in. colombian cement producer argos, for example, is banking on a recovery in the Us housing market and rising demand for concrete after buying the southeastern Us assets of France’s lafarge for Us$760m in 2011.

“the Us is looking for investors from latin america, not just chile,” said pérez.

frank sinatra market

But companies must be prepared to work hard. as chilean firms

in the Us can attest, american consumers are amongst the most demanding in the world. in fact, according to lenny-passagno, the spanish call the Us their “Frank sinatra market” – if you can make it there, you can make it anywhere.

“this is a way for foreign companies to ensure they are continually improving their processes and their offering,” she said. “it’s like a free consulting service.”

Us tax regulations are also relatively simple, but it helps to use a good accounting firm. “it may seem overwhelming at first, but the beauty is that once you understand the regulations everything is very clear,” said lenny-passagno.

a double taxation treaty, which

To obtain more information about the SelectUSA program, please contact the Commercial Service at the US Embassy in Santiago: [email protected]

ellen lenny-Passagno, Us Embassy

“The us is the unchartered frontier for Chilean companies, they are underweighted in terms of their investment in the us.”

Kevin morgan, crystal lagoons Usa

“it is still a good time for Chilean real estate companies to invest in the us, particularly in florida, taking advantage that this market is still in a recovery phase.”

has been signed by chile and the United states but still needs a congressional rubber stamp in both countries, will create an even more favorable environment for chilean companies to invest, she said.

roxana orellana knows that expanding in the Us will be a tough test for her company. But she likes the chances of success for romatech’s electricity metering device, which allows consumers to cut their energy bills.

“america was not a saving country but that has changed since the recession,” she said. “now is a good time to sell anything to do with saving.”

as for investment promotion efforts like selectUsa, pérez said they can help “on the margin” but if companies do not have the financial and logistical capacity to handle the Us market then no amount of information will change that.

“the main variable is the condition and motivation of chilean companies to invest,” said pérez. Even so, personalized assistance can help, especially for medium size companies like romatech that are new to the Us market.

the United states represents an opportunity for chilean companies to not only diversify, but also to grow in a sophisticated market with huge potential. With president obama rolling out the red carpet for foreign investors, you could say there has never been a better time for chileans to make it in america. as the sinatra song goes, it’s up to you.

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ernardita pérez can’t live without her iphone. the 26-year old chilean entrepreneur uses it to arrange meetings,

organize events and answer emails. “it’s very hard for me to give up my iphone because it’s my main tool for work,” she said.

pérez is co-founder of the startup people connect that organizes networking events for young professionals in chile. she and her cousin came up with the idea for lunches sponsored by local companies a few years ago. since July 2012, they have held nine ‘Free lunch’ events with each drawing around 400 people. Given their success, they are now planning to develop Free Brunches as well as an online networking platform, she said.

“the idea is for young executives to increase their network of professional contacts through human relationships and not just on the internet,” she says.

pérez is part of the millennial generation, also known as Generation Y. Born between 1980 and 1995, this generation grew up with the internet and cellphones. in some ways, pérez is a typical millennial. she sees herself as

creative and likes “innovation, change and challenges”. like others of her generation, she also feels the need to stay connected through technology to what is happening in the world.

“it’s a very open generation, we’re always seeking new opportunities,” she says.

But she is also sharply critical of her generation’s shortcomings. “We have always had more or less everything we need and it is hard for us to make a sacrifice for

any idea or goal,” she says.that is not to say millennials

are lazy. today, this generation is becoming more important in chile as they start their own businesses or join the workforce. according to chile’s national statistics institute, there were an estimated 4 million millennials living in chile in 2010, representing nearly a quarter of the population. around 300,000 of them enter the labor market each year from universities and technical colleges. But

SpECial rEporT

according to a new survey, millennials in Chile believe in the power of technology, are optimistic about the economy and think they can make a difference in their country, but companies aiming to use their talents must adapt to their interests or risk losing them. By Julian Dowling

Generation y in chile: What do Millennials Want?

B

employers often know little about what motivates and interests them.

chilean millennials are not very different from their peers in the Us, says Jason dorsey, a 29-year old american author, known as the Gen Y Guy, who recently spoke in chile at an event organized by the Blacksheep social media center.

millennials are not “tech-savvy” but rather “tech-dependent”, he said, “if you want us to take out the trash you better text us”. millennials also need to be taught basic skills like how to dress properly in the workplace – “show us examples so we know what you want,” he said.

For employers, this represents a challenge. although university graduates tend to be more adaptable and malleable than older workers, they are also more likely to seek greener pastures elsewhere, said patricia leighton, a senior consultant at santiago-based Boyden global executive search.

“there are downsides but there are also positive things about recruiting younger generations,” she said.

the recruiting process also looks different. these days millennials show up for job interviews with an ipad rather than a notebook, she said. But beyond the technology, the workplace environment is also changing to suit millennials.

Birgit nevermann, manager of laborum selección, the recruitment division of chilean employment site laborum.com says that companies have no choice but to adapt to the demands of the new generation. “millenials are looking for jobs where they can have a good time, they don’t want a job for life,” she said.

the key for recruiters, she says, is to figure out what millennials want and give it to them. But that is not as easy as it sounds.

adapting to Gen Y

some companies in chile have successfully adapted to Generation Y. take parque arauco, a chilean mall developer with operations in chile, peru and colombia. Following a recent change in management, the company began hiring millennials


SpECial rEporT

bernardita Pérez, people connect

“We are a freer generation and less focused on what we ‘should be’ but constantly in search of something more.”

Jason Dorsey, the Gen Y Guy

“our biggest takeaway from our work in Chile was how willing Gen Y was to be engaged in conversations on everything from new products to employment.”

two years ago and, as of september, it had 66 employees between 20 and 30 years old out of a total of 220.

“We have to prepare the younger generation to eventually replace us, so that makes us more open to their personal characteristics,” said carolina Galletti, the company’s manager of human resources.

But working with young people has taken some adjustment, she admits. “they know exactly what they want out of life… they don’t live to work, they work to live.”

parque arauco works with several headhunters to recruit millennials out of university but keeping them motivated is a challenge, she said. “if your company wants to keep them interested, you have to give priority to their interests.”

Her company has done this by negotiating things like flexible work hours and extended

chat with on Whatsapp”.

Technology dependence

a recent global survey of millennials by telefónica and the Financial times shows that chilean millennials are even more connected than their counterparts in other latin american countries.

this is partly due to smartphone penetration. according to the survey, which included 500 chileans aged 18 to 30, 73% of millennials use smartphones compared to 68% in latin america. in addition, 89% believe technology has made finding a job easier versus 85% in the region.

“it’s a hyper-technologized generation,” said carola courard, a market intelligence consultant at telefónica chile. “chileans feel even more comfortable with new technology than in the rest of the world.”

this also affects their work habits. according to courard, millennials suffer from what she calls a Fear of missing out, or Fomo. this explains why they are constantly checking their smartphones, she said. For older generations, this technology obsession can be hard to deal with, but it also has an upside for companies.

parque arauco, for example, gives its employees smartphones and has created a new intranet that has the look and feel of Facebook, said Galletti. this allows its employees to communicate and receive corporate information and feedback, she said.

“it’s not a social network because we can control the

vacations, she said. although a good salary is appreciated, money is only important insofar as it meets their living needs, she said. “they are not thinking about getting married and supporting a family like previous generations.”

more important for millenials is the “challenge” of something new, she said. they do not care for long-term goals, but are focused on short-term objectives. pérez couldn’t agree more. “For me, working from 9 to 5 is ridiculous! it’s much more attractive to have goals and achieve objectives,” she said.

When it comes to their employer, millennials look for a boss who guides, teaches and warns about possible dangers, but leaves you free to experiment and move forward, said pérez. in other words, they want a “coach” more than a boss, said Galletti. “someone they can

Success... Success... Success... Success...

Boyden21,5x28 AmCham 11-13.indd 1 18-11-13 10:53


comments, but the new intranet is very similar to a social network,” she said. “We knew we had to advance in technology or be left behind.”

social media can also be an important tool for recruiting and marketing. the overall engagement of social media for recruiting is still much lower than in the Us, but it is clearly on the rise in chile, said dorsey.

the younger generation can also find more creative ways of exposing a brand, said leighton. millennials are able to think outside the box, which can help companies to create marketing campaigns that appeal to others of their generation, she said.

of course, social media is a double-edged sword – sites like Facebook can be used for sharing proprietary information, which has led some companies to restrict access. But in general millennials use it more to stay

Carolina Galletti, parque arauco

“it is important to give millennials short term goals because, unlike other generations, they don’t see themselves staying in a company for 10 years or more.”

birgit nevermann, laborum selección

“What clients look for in candidates hasn’t changed, but what millennials look for in companies has changed and companies have to adapt.”

SpECial rEporT

in touch with their friends than to look for a job, said leighton. “it’s about making themselves visible,” she said.

the key is how access is managed within companies. the position of Web manager is now common in many large chilean companies, but smaller companies are just now learning how to use social media for marketing and communications, said nevermann.

millennials are not going to give up their smartphones – like pérez, they have become dependent on them – but they can be encouraged to use them in ways that benefit the company, she said.

Keeping millennials happy

partly because of technology and their access to information, millennials in chile are not staying in jobs as long as their employers had hoped.

Where employers naturally worked somewhere for at least three years, they are observing millennials who are leaving after six months because they felt “bored” at work, said Jason dorsey.

Unlike their parent’s generation, millennials do not expect to stay put for a long period, said parque arauco’s Galletti. “they don’t project themselves in a company for 10 years, that’s impossible, two years yes,” she said.

turnover can be reduced if millennials are a good match for the company, said leighton, adding that some companies like procter & Gamble recruit candidates from universities and then offer them opportunities for travel and advancement within the company. But even then millennials tend to get restless.

this problem is not unique to chile, which means that the

same strategies that work in the Us will also work here, said dorsey. these include short-term “stretch projects” every quarter, emphasizing the mission and culture of the company in addition to the pay, he said.

to make millennials feel like they are making progress, he suggests giving them business cards and regular feedback, even something as simple as saying “good job”.

telefónica’s courard agrees that young people need coddling. “With small details you can make the millennial feel valued,” she said.

multinationals in chile are leading the way in this regard. For example, citibank has incorporated the idea of ‘home office’, which allows workers to telecommute; coca cola has a system of flexible benefits, and procter & Gamble uses social media extensively.

some companies have also


adapted their office environment to suit millennials. telefónica and parque arauco, for example, have lowered partitions between cubicles to facilitate communication and interaction. other companies have eliminated office chairs completely, instead using starbucks-type docking stations to make millennials to feel at home, said leighton.

“things have definitely changed and not just because of technology but also because of the benefits of moving around and interacting more,” she said. “there’s less privacy, but younger people are more used to that.”

mobility is not all millennials look for – they also want to work in a company that has social responsibility programs and cares about the environment. leighton suggests companies offer bike racks, healthy snacks, recycling programs, weekend excursions and other things that appeal to millennials. not many chilean companies are doing this yet, but california-based tech companies like pixar and Google are good role models, she said.

Even free food and nap rooms, however, may not be enough to stop millennials from moving on after a few months. But companies can protect themselves through succession planning and using technology to ensure that information is shared within the company, said nevermann.

“the idea is that people don’t take the know-how with them when they leave,” she said. “if a manager leaves shell, there is still gas at the pump.”

access to opportunities

the pool of university graduates in chile is relatively large. But resource-based companies, many of them headquartered

chilebUSiness

Julian Dowling is Editor of bUSiness CHILE

Patricia leighton, Boyden

“if [millennials] don’t find a job that matches their lifestyle and interests, then they will be switching around from one job to the other.”

in santiago, also need qualified candidates for their facilities in the north of the country in the case of mining, or the south in the forestry and salmon industries.

the problem is that, given chile’s top universities are all in santiago, the best candidates are concentrated in the capital. the solution is to find graduates who want to go back to their regions to contribute, said nevermann. “this is positive for development of the regions and decentralization,” she said.

But that is easier said than done. millennials are willing to travel while they are young, but most prefer to raise a family in santiago, said nevermann. as a result, many large companies send employees to cities like antofagasta or puerto montt to work shifts of a few days or weeks, which can have a high cost.

part of the problem is lack of access to opportunities. Young people outside santiago tend to

be less optimistic about their job prospects and more financially challenged than their peers in the capital, said dorsey. “there’s a strong contrast between urban and rural in chile,” he said. “access to economic opportunity varies in different parts of the country.”

another problem is the relatively high cost of education in chile, said dorsey. Building a highly skilled labor force that is able to be entrepreneurial and more sophisticated in the marketplace means making education financially accessible, he said.

companies can offer future employees scholarships and tuition reimbursements to defray costs, but improving access to education and training opportunities in chile is not just the responsibility of the private sector. “a quality education is critical for the success of chile,” said dorsey.

For now, chile’s strong economic growth and near full employment means that companies looking to grow must adapt to attract the best and brightest graduates. that might change in the future though, especially if employment drops, pointed out nevermann, and the shoe could one day be on the other foot.

But millennials are nothing if not optimistic. according to the telefónica survey, 90% of young chileans believe the country’s best days are still to come, versus 67% globally.

adaptation can be difficult, but companies able to harness the energy and optimism of Generation Y will succeed where others fail. after all, millennials like Bernardita pérez are chile’s leaders of tomorrow.


orporate social responsibility (csr) is no longer a new concept in chile. Eleven years ago, when amcham

chile created an award to recognize socially responsible business practices, this idea was relatively unheard of, but that has changed. today, companies of all sizes, from startups to multinationals, have special departments and managers specifically devoted to csr.

the importance of social responsibility in chile has grown as companies have realized that community programs, which are often promoted on social media, can help to build their brand value with workers and customers, while at the same time giving back to the communities where they do business.

amcham’s Good corporate citizenship award, created in 2002, is a annual competition for companies looking to see how their programs stack up. the winners, which are selected by a jury, receive publicity and recognition for their programs. the idea is that other companies will then be able to emulate them throughout the country.

originally, amcham gave just one award for the best program nationally, but new categories have been added including innovation, community development, the environment and, most recently, small and medium-sized enterprises.

on october 25, amcham handed out its 2013 Good corporate citizen award to four projects that, in the

opinion of the jury, were the best examples of csr in the country. as in previous years, the competition was tough – 23 companies presented a total of 28 programs in areas ranging from education and training, to energy efficiency and Wifi access. the programs were evaluated using a methodology developed by chilean consultancy sustentarsE.

paola Berlin, a news anchor on cnn chile, hosted the awards ceremony at the sheraton Hotel, which was attended by members of the jury, amcham directors and other guests. the sponsors of the 2013 version included arauco, diario Financiero, deloitte,

SpoTlIGhT

cBy Julian Dowling

Good corporate citizens

cnn chile and poder & negocios.roberto matus, General manager

of amcham, spoke during the ceremony and emphasized that responsible business practices are key for the competitiveness of chilean companies in today’s society. social responsibility programs, he said, can add value to a company’s products and services, while improving the economic and social situation in local communities.

“We believe the country has taken important steps in this process and for us it’s very important to be a part of this activity,” he said.

amCham’s Good Corporate Citizenship award celebrates socially responsible business practices at a time when companies in Chile need to build better relationships with consumers, workers and members of the communities where they do business.

Good corporate citizenship Winners 2013: rodrigo mobarec, colbún; alfonso salinas, Gnl Quintero; carolina Valdivieso, amcham; Humberto Ulloa, Komatsu cummins; Gloria salgado, chilectra

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carolina Valdivieso, Vice president of amcham, spoke on behalf of First lady cecilia morel, a member of the jury who was unable to attend. she said the award is an “especially noble initiative” because it is focused not only on the material benefit for the community, but also its “spiritual” well-being.

But companies need to do more, said ignacio larraechea, cEo of the chilean csr non-profit acción rsE. He pointed out that although csr now attracts some of chile’s best university graduates and many companies now have codes of business ethics, there is room to improve.

High profile cases of business malpractice in chile have shaken consumer confidence, while labor conflicts have increased in frequency and duration, entailing higher costs for companies, said larraechea.

the business community only has itself to blame for this situation, but it is not too late to turn things around, he said.

“there is no one who is blameless, we can’t point fingers, but we are in the process of changing and improving these practices,” he said.

He cited a survey by acción rsE of chilean university students, which showed that 82% believe that companies only worry about maximizing their profits at the expense of the well-being of people and the environment.

this lack of trust, he said, is reflected in the energy sector where several large power generation projects needed for chile’s economic development have been put on hold or cancelled due to local opposition.

“Building trust is, today, the main challenge for chile to develop in all

aspects: economic, environmental and social,” he said.

rebuilding trust

But the energy sector is leading the way in rebuilding this trust. the winner of this year’s main prize, Gnl Quintero, is a prime example of an energy company that is doing something to restore confidence in the sector. the consortium – comprised of terminal de Valparaíso, metrogas, Endesa and Enap – presented a project that has helped fishermen in communities near its lnG regasification terminal at Quintero, on chile’s central coast, to diversify their productive activities and improve their economic situation.

“the program empowers people as agents of change in their community through training, access to networks and support for production diversification projects,” said Javier


SpoTlIGhT

irarrázaval, president of amcham’s social responsibility committee.

the benefits for the company are also clear. While other projects in the Quintero area have had trouble getting environmental approval, it has managed to get approval without much opposition, said alfonso salinas, sustainability manager at the company.

“to be frank, the work we are doing is not inspired by this, it’s not so they let us do more projects, it’s inspired by a real commitment to the community,” he said.

as long as the stakeholders in Quintero remain impoverished the project is not sustainable, said salinas. “We have to help them improve their quality of life.”

two of this year’s other winners – chilectra and colbún – are also related to the energy sector. in the community development category, chilectra won for its project cátedra chilectra that aims to improve employment prospects for students of electrical programs at the country’s technical colleges. it works by taking an integral approach to education, focusing on the academic, personal and family development of students.

“our workers are the ones who give the classes and get involved with the

training of the new technicians who will work for us and our subcontractors,” said Gloria salgado, communications manager at chilectra.

in the Environment category, power generator colbún won for a project that addresses chile’s water shortage. in some areas of central chile the company competes for water resources with farmers, but in the maule Valley it saw an opportunity for cooperation rather than conflict. it has an agreement with the Farmers’ association of maule sur to provide training in efficient irrigation techniques and technology transfer focused on small-scale farmers. it also promotes the development of mini-hydro projects on irrigation channels administered by the association.

Finally, the number of young people driven to crime is a major problem in the most vulnerable chilean communities. the company that won in the innovation category, Komatsu cummins, saw an opportunity to rehabilitate young offenders and give them a path to employment. its project, reinventarse (literally, reinventing yourself), provides psychological support and counseling to help young people finish high school and then places them in internships in the company.

ignacio larraechea, acción rsE

“We hope that businesspeople step up and see that rehabilitation of young offenders is possible… crime affects us all and we must fight it together,” said Humberto Ulloa, manager of legal affairs at Komatsu cummins and a member of Fundación reinventarse’s board.

looking to the future

all the prizewinners agreed that the business environment in chile is complicated given the current climate of distrust. But they also expressed optimism that projects like the ones they presented this year can make a difference, not just by showing that companies care about their communities, but also by having a real impact on the lives of stakeholders in these communities.

as salinas at Gnl Quintero pointed out, ignoring these stakeholders is not an option – and supporting them makes employees and customers feel good. “it’s like we are all happy that chile qualified for the World cup, why are we happy? Because we’re chileans,” said salinas.

Jury members

the jury that selected the winners of amcham’s Good corporate citizen award 2013 was formed by: cecila morel, First lady of chile; Kathleen Barclay, president of amcham; Javier irarrázaval, director of amcham and president of amcham’s social responsibility committee; Jeffrey Vick, consul General at the Us Embassy in chile; cecilia castro, president of corporación de dirigentes de campamentos; ignacio larraechea, cEo of acción rsE; Gonzalo delaveau, president of chile transparente; Bruno Krumenaker, president of Generación Empresarial; and andrés santa cruz, president of the confederation for

For more information about AmCham’s Good Corporate Citizenship Award please contact [email protected]


roberto matus has been appointed as the new General manager of amcham chile as of october 1. matus is a chilean diplomat with over 20 years of experience in the Foreign affairs ministry.

since september 2009, he served as deputy chief of mission at the chilean Embassy in Washington, dc. in this position, he participated actively in the negotiations of the chile-massachusetts agreement, various presidential visits and was in charge of managing the Embassy. Between 2006 and 2009, he served as chief of cabinet of then-Foreign minister alejandro Foxley. From 2001

to 2006, he was head of the Economic and trade office of the chilean Embassy in the Us. in this position he worked on the negotiations towards a free trade agreement between the two countries, and led the strategy for approval of the agreement by the Us congress.

“matus’ extensive knowledge and vast experience in economic, commercial and political matters of the chile-Us relationship is a valuable asset in the new era of development and growth that amcham chile will face in the coming years,” said amcham president Kathleen Barclay.

professor lovell Jarvis has been appointed chairman of the chile-california council. He replaced agustín Huneeus, who had chaired the council since its creation in 2011. isabel Valdés and Francisco silva were selected as Vice chairs for chile and california, respectively.

Jarvis is professor of agricultural and resource Economics at the University of california, davis, where he is also special assistant to the dean, college of agricultural and Environmental sciences; director of the richard Blum center for developing Economics; and Faculty director of the Uc davis-chile partnership program, which he initiated in 2008. Jarvis has a phd in Economics from mit.

“i look forward to promoting dialogue and discussion on a broad range of issues that are important to both chile and california. Each has perspectives and experience of value to the other,” he said.

New AmCham General Manager Appointed

UC Davis Professor to Chair Chile-California Council

AmChAm nEwS

roberto matus

professor lovell Jarvis

Energy Seminar on Socio-Environmental Management

on october 15, the chile-Us Energy Business council organized a seminar that focused on the socio-environmental management of energy projects. amcham General manager roberto matus and the council’s Executive secretary, rafael lorenzini, attended. other guests included terry Yosie, cEo of the World Environment center (WEc), Fernando Hentzschel, head of the technical division at the chilean center for renewable Energies (cEr), and Jorge plauchú, an international energy and climate change consultant.

Yosie talked about how new technologies are changing the energy scenario in the United states, and Hentzschel explained the chilean government’s non-conventional renewable energy initiatives. Finally, plauchú discussed the evolution of energy efficiency and the new concept of “eco-efficiency”.

roberto matus, amcham; terry Yosie, WEc; Fernando Hentzschel, cEr; rafael lorenzini, amcham and Jorge plauchú, energy and climate change consultant


nEw mEmbErSPanexport industrial equipment stanislaw lozecznick,managing director

aden business school Education & trainingpatricia González,corporate director

seko logistics Chiletransport and logisticsGonzalo aravena,account manager

oTeC instituto Chileno norteamericanoEducation and trainingricardo mery,Executive director

JogoEarly Education materialspablo Gaete,General manager

AMChAM coMMitteeson october 2, matías Vergara,

a specialist in communications and coaching, was invited to a meeting of the marketing and communications committee. His talk was titled “neuro-linguistic programming: Understanding the customer”.

on october 18, the legal committee held a meeting on Us visa requirements and the Visa Waiver program. the speakers were Us consul General in chile, Jeffrey Vick; Vice consul sara clymer, and stephen Buchanan, attorney for the tlc trade company.

on october 16, carolyn robert, international trade lead specialist at the inter-american Bank of development (idB), spoke at a meeting of the trade Facilitation committee. she discussed idB initiatives to identify the main barriers affecting international trade. sandra miró chaired the meeting.

Fabio Miranda, American Express; Claudia Torres, Bodegas San Francisco; Matías Vergara, Universidad Andrés Bello, and Felipe Serrano, Agencia de Aduanas and Patricia Gallardo, AmCham.

Kathleen Barclay, AmCham; Carolyn Robert, IDB; Sandra Miró, AmCham; Andrés Rebolledo and Sebastián Marambio, IDB.

Stephen Buchanan, TLC Trade Company; Sara Clymer, US Embassy; Jeffrey Vick, General Consul, and Michael Grasty, AmCham

Lunch on Corporate Donations to the Artson october 16, roberto

ampuero, minister of the national council for culture and the arts, spoke at an amcham lunch about the importance of corporate donations for the arts as a means to promote chile’s development.

amcham president Kathleen Barclay and General manager roberto matus attended the lunch. other guests included Borja Baselga, director of Fundación santander, robert lynch, president of the organization americans for the arts; rupert myer, chair of the australia council for the arts, and Juan carlos silva, legal advisor at chile’s culture ministry.

the lunch preceded the 4th seminar on culture and Economy, which was held at the centro Gabriela mistral (Gam) on october 17. titled “towards a sustainable culture” and sponsored by amcham amongst other organizations, this was a space for reflection about financing for the arts, new tax incentives and the impact of culture on development.


AmChAm nEwS

AACCLA 2013 Annual Meeting and Conference

Chile’s Foreign Minister Alberto Moreno addresses the AACCLA meeting via video conference.

Sandra Miró, AmCham Chile Director and AACCLA Vice President

amcham president Kathleen Barclay and cEo roberto matus attended the 2013 annual meeting and conference of the association of american chambers of commerce in latin america (aaccla) from september 29 through october 2 in Washington, dc. during the three days of meetings, discussions were held with senior member of the Us state department, department of commerce and the United states trade representative, as well as with senior business leaders from across the hemisphere. Key areas of interest included competitiveness, energy and education (within the context of workforce development).

progress with respect to the trans-pacific partnership and initiatives regarding trade

facilitation were also reviewed. Foreign ministers from the pacific alliance countries addressed the conference by way of video conference. it was the general feeling of the audience that the creation of the pacific alliance is one of the most significant developments in strategic foreign policy to come from the region.

in other news, amcham chile director and country head for dHl, sandra miró, was elected to the board of aaccla. meanwhile, luis alberto moreno, president of the inter-american development Bank (idB) was awarded aaccla’s highest honor – the Eagle of the americas. overall, the tone of the meeting was very positive with respect to the region’s future including growth opportunities for the private sector.


desarrolla programas de Inglés Corporativo

Su estrategia de negocios

altamente especializados.

www.sesachile.cl

[email protected] (56-2) 2412 6670

Resultados rápidos concretos y medibles. Clases presenciales y virtuales.

Profesores nativos, licenciados y certificados.


on november 5-8, chilean multinational crystal lagoons gave a presentation in chicago at the most important annual meeting of the Us real estate sector– the 2013 Fall meeting of the Urban land institute (Uli).

“We are very proud to present at Uli on the exponential growth of crystal lagoons’ technology and concept in less than five years, and to announce our first Us project in Florida,” said Kevin morgan, cEo of crystal lagoons Usa.

in october, crystal lagoons, which develops crystalline lagoons around the world using its patented technology, announced a new project in thailand. the project, called mahasamutr, will consist of 90 luxury villas, all of which will have access to a seven-hectare crystalline lagoon.

AmChAm mEmbErS nEwS

on october 1, Viña concha y toro launched its first ever sustainability report at a breakfast at the Hyatt Hotel. Valentina lira, assistant manager of sustainable development for the winery, presented the report to media and other guests.

this report was prepared under the Global reporting initiative (Gri) methodology. its contents are divided into six strategic pillars: product, customers, supply chain, people, society and the Environment. these were defined considering the opinions of different stakeholders including suppliers, wine industry associations and employees’ representatives.

“Each pillar has defined objectives which allows us to evaluate and plan our next steps, because we understand sustainability is a path of permanent change and improvement,” said the company’s president, alfonso larraín. the report is available as an application for ipad and iphone in the app store.

Concha y Toro Launches Sustainability Report 2012

Crystal Lagoons at Chicago Real Estate Meeting

crystal lagoons’ project mahasamutr in thailand

Proforma Partners with Coquimbo Industrial Association

in october, otEc proforma signed an agreement with the industrial association of coquimbo (asoinco) to provide human resources advisory services to companies in the coquimbo region.

rubén Vega, president of asoinco, and sandra Bravo, regional manager of atacama and coquimbo for proforma, signed the agreement during provExpo 2013 at the Hotel Enjoy coquimpo. the Expo brought together mining, energy and services companies to network and discuss investment opportunities in the coquimbo region.

carla Guerrero, Francisca araya and sandra Bravo, proforma; rubén Vega and Jorge Garrido, asoinco; daniela ríos, cap minería and oriella Bertolla, proforma

alfonso larraín with Valentina lira and cristóbal Goycoolea, concha y toro’s manager of sustainable development

Urban land institute meeting (left to right): Fernando Fischmann and Kevin morgan, crystal lagoons; cristián alliende, aconcagua, and david Feltman, aegon Usa realty advisors


the 9th annual Bci Business meeting was held in antofagasta in october. it included 600 meetings between small and medium-size companies and purchasing divisions of 30 large companies.

“the biggest challenge for smEs is to diversify their portfolio of clients because they do not always have the networks and time needed to offer their products or services to new customers,” said Juan pablo stefanelli, manager of Bci’sEntrepreneurs’ Bank. “this type of meeting is an important space for them to expand their networks,” he said.

Gabriela Peralta was recently promoted to general manager and legal representative for American Airlines in Chile. With 22 years in the company, Gabriela has acquired extensive experience in many areas, including as a reservations agent, account executive, Premium Services and Admirals Club coordinator, and airport manager prior to her current position.

Ricardo Martínez has joined the financial consultancy Acender in the position of associate director of Risk & Technology. he has previously worked in financial and consulting firms in Chile and abroad. his last job was at Teradata, as Senior Industry Consultant, leading various projects at the regional level.

Ricardo Ceballos is the new general manager of Royal Santiago hotel, operator of the Radisson hotel chain in Chile. A Colombian executive, he has vast experience in the hospitality industry, having served previously as sales executive and director of Royal hotels of Colombia, as well as director of Royal Santiago hotel.

Gabriela Peralta, american airlines

ExECUTIVE aPPoinTmenTs

Proforma Partners with Coquimbo Industrial Association

ricardo Martínez, acender

ricardo ceballos, royal santiago hotel

UPS Business Monitor Latin America 2013

the sixth edition of the Ups Business monitor latin america was launched at the atton Hotel in santiago in september. according to the study, latin american executives consider the recruitment and retention of qualified staff, as well as government support, to be key to enhancing the competitiveness of small and medium-size enterprises (smEs) in the region.

Executives surveyed in the study, which is sponsored by Ups and covers seven countries in the region including chile, said that governments must focus on improving access to capital and financing, as well as education and training. the study indicated that 47% of executives said that they are in a better economic position than they were a year ago.

“the study clearly demonstrates that latin america is at the forefront of growth and we see that smEs are predominantly optimistic about the coming months,” said José acosta, president of latin american operations and public affairs for Ups americas region.

José acosta, Ups americas region

the chilean association of Exporters (asexma) held its annual meeting at casapiedra in santiago on december 17. the event, titled a corazon abierto (open Heart), was billed by asexma president roberto Fantuzzi as a “surgical intervention” to discuss chile’s current economic system. around 1,200 executives and government officials were expected to attend.

Asexma Annual Meeting at Casa Piedra

asexma invitation

Bci Business Meeting in Antofagasta

Juan pablo stefanelli, Bci; claudia meneses, Economic secretary for antofagasta (seremi), and tomás Flores, Undersecretary for the Economy ministry.


AmChAm pEoplE

on october 21, senators alberto Espina, Ximena rincón, Francisco chahuán and ricardo lagos Weber were the speakers at an amcham breakfast at the intercontinental Hotel in santiago. they discussed some of the main proposals of presidential candidates Evelyn matthei and michelle Bachelet. Gustavo manén, political Editor at cnn chile, moderated the discussion.

Senators Debate Presidential Proposals

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Christopher lathrop, rodrigo valencia, Kahori shigeta and humberto ulloa, Komatsu Cummins sergio Carstens, maría José riffo, Patricio oyanadel, eliana Cavieres and Jorge Delgado, Codelco ignacio larraechea, susana rojas and bárbara asenjo, acción rse; Javier irarrázaval, amCham; sandra miranda and Diego Poblete, aramark olaya Cambiaso, fundación Chile, and Paulina soto, Cnn Chile max massardo, Paulina rodríguez, Gonzalo Tagle, maría José García and sergio Giacaman, essbio alfonso salinas, Gnl Quintero; sebastián silva, feedback and antonio bacigalupo, Gnl Quintero

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francisco Chahuán and alberto espina (national renewal Party, rn); Ximena rincón (Christian Democratic Party, DC); Kathleen barclay, amCham, and ricardo lagos Weber (Party for Democracy, PPD). ernesto byrne, radisson Chile, and eduardo moyano, inversiones moyano luco Gabriela Chamorro and ashley Worne, Cbre Chile; Pilar Pérez and Consuelo espinoza, unipack Chile valentina santa maría and alfredo Patiño, hilinks Comunicaciones Jaime bazán, Chile Transparente; Paulina salman, hilinks Comunicaciones, and Toshihiro shimazaki, mitsubishi Chile Juan somavía, anglo american; roberto matus, amCham, and Gonzalo biggs, figueroa, valenzuela y Cía.

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on october 25, amcham’s 11th annual Good corporate citizenship awards were announced in a ceremony at the sheraton Hotel. the awards recognize member companies with corporate social responsibility programs that directly benefit the community.

2013 Good Corporate Citizenship Awards

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nicolás Paut, Cnn Chile; alejandro micco, economic advisor to michelle bachelet; felipe morandé, economic advisor to evelyn matthei, and ricardo García, amCham nicolás Chiappara and Gabriel Calgaro, Cisco systems roberto alarcón, Yamana Gold; Pamela Werbin, boyden; Ximena niño, Deloitte and marcelo Prado, Caterpillar leasing Chile rafael lorenzini, amCham, and Pablo Cruz, relsa rodrigo hollmann, burson-marsteller; luis Guillermo Cerna, Develop international Consulting; mónica retamal and martín lewit, Ki Teknology

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on october 4, Felipe morandé and alejandro micco, economic advisors to presidential candidates Evelyn matthei and michelle Bachelet, respectively, debated their candidates proposals at an amcham breakfast at the ritz carlton Hotel. the debate was moderated by nicolás paut, Economy Editor at cnn chile.

Breakfast with Presidential Candidates’ Economic Advisors

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he chile-massachusetts Energy Forum was held in Boston on september 25-27 to address the challenges of the energy

industry in chile. mit professor arnoldo Hax, who is president of the chile-massachusetts council, attended along with chile’s Energy minister, Jorge Bunster, and chile’s ambassador to the United

states, Felipe Bulnes. Kathleen Barclay, president of amcham chile and the chile-Us Energy Business council, represented the chamber. other guests included representatives from chilean energy companies, the state of massachusetts, research institutes and universities such as Harvard and mit, among others.

topics discussed included

non-conventional renewable Energy (ncrE), shale gas, energy efficiency and smart grids. the debate demonstrated the clear framework of collaboration that exists between chile and massachusetts. along with cooperation in education and biotechnology, energy is one of the pillars of an agreement signed by president piñera and

tBy rafael lorenzini

facing chile’s energy challengesat a recent meeting in boston, Chilean executives learned how massachusetts’ experience in promoting non-conventional renewable energy technologies and building green communities could help Chile.

AmChAm SpECIAl

Executives at the Chile- Massachusetts Energy Forum: William Phillips, Chilean Energy Efficiency Association (AChEE); René Muga, the Chilean Generators’ Association; María Paz de la Cruz, Center for Renewable Energies (CER); Paul Schioltz, Methanex; Rafael Lorenzini, AmCham, and Carlos Finat, Chilean Renewable Energy Association (ACERA).

Amcham Chile and the Following Sponsor Companies Wish You a Merry Christmas

massachusetts Governor deval patrick in 2011.

minister Bunster stressed that future efforts in chile should be based on three axes: generation, connectivity and the consumer. in generation, he said opportunities should be identified for new technologies, liquefied natural Gas (lnG) and ncrE. He also said lower barriers to entry would improve competitiveness in chile’s central and northern electricity grids (the sic and sinG, respectively). connectivity, he said, requires robust transmission and distribution networks that are easily accessible to new actors. regarding consumers, he said these should be encouraged to

become more involved in energy efficiency projects and distributed generation (power produced by consumers).

according to the chilean center for renewable Energy (cEr), in september non-conventional renewable energy, including bioenergy, mini-hydro, wind and solar, represented 6.06% (or 1,069mW) of chile’s total installed capacity. Given the recent enactment of law 20/25, which establishes the goal of obtaining 20% of energy supplies from ncrE projects by 2025, this percentage should more than triple in the next decade.

at the forum, amcham’s Barclay emphasized the benefits of using

chile as a natural laboratory for these types of generation technologies. she pointed out that chile is one of the few countries in the world that offers an ideal geography for the development and installation of diverse sources of non-conventional renewable energy.

a theme at the meeting, which has attracted the attention of stakeholders around the world and not just in chile, is the increasing involvement of social actors. according to a study by chile’s national Human rights institute (indH), 40% of socio-environmental conflicts in the productive sector involve energy projects. “the problems are not

AmChAm SpECIAl

Co-Organiza:

Av. Vitacura 2909, Of. 307. Las Condes, Santiago – Chile.Oficina: +56 2 28473300 / Fax: +56 2 28473310

[email protected] / [email protected]

chilebUSiness

Rafael lorenzini is Executive Secretary of the Chile-US Energy Business Council

technical, they are political and social,” said Hax. an example is the opposition to the controversial Hidroaysén hydroelectric project in chile’s aysén region.

But communities can be a part of the solution. the experience of massachusetts’ Green communities act, enacted in 2008, shows the desirability of establishing fluid communication with communities, which are committed to resolving the challenges of energy development.

no project is exempt from environmental impacts. some studies favor a certain type of generation, such as wind or solar, but lawrence susskind, a leading public policy mediator

and professor at mit, stressed that all require special care with communities. issues such as compensation, timely communication, and the involvement of civil society in energy projects can be transformed into opportunities.

in energy efficiency there is also a big opportunity. according to experts, it is the fastest and cheapest energy available. the state of massachusetts has achieved the highest levels of energy efficiency in the United states for years, and this is partly due to the participation of different sectors of society, but also to the government’s leadership. chile needs stronger

leadership and market signals from the authorities. new initiatives, such as the inter-ministerial committee on Energy, which is promoting energy efficiency as part of the national energy strategy, are welcome.

thanks to the Boston forum and the work being done by the Energy Business council, these issues are being addressed fully and concretely with a view to drafting a report titled “seven challenges Facing the Energy industry”, which should be available in early 2014.


promoting Chile abroadrincipal Financial Group is a Us-based Fortune 500 company that manages assets worldwide totaling over Us$450 billion. together, Brazil, mexico and chile represent 20% of the group’s holdings. in chile, it owns pension fund manager

aFp cuprum and manages Us$43 billion in assets.roberto Walker, president of latin america for principal

international, is often on the road but on a recent stop in santiago he sat down with bUsiness cHilE to discuss the latest chile day and the post-election economic outlook.

chile day is an annual event organized by inBest that brings together executives from around the world to promote chile as a destination for investment. this year’s version was held in september in london with over 300 chilean executives, foreign investors and government officials.

Was this your first Chile Day?Yes and i hope not the last. it was a positive experience;

i was surprised by the interest generated by chile day, not just from chileans but also in Europe and other parts of the world. it is healthy to recognize chile as a country that is relatively small but well administrated and therefore needs to promote itself. maybe china and Brazil don’t have the same need because they are big countries, but chile has to be proactive in promoting its attributes.

What is the attitude of foreign investors towards Chile?Foreign investors have always been interested in coming

to chile. this is a global trend and i don’t think it’s temporary or very recent. companies in the world are looking for opportunities to grow and we believe that emerging markets will continue being the most dynamic part of the world economy.

chile offers attributes like political stability and a strong democracy. it has economic stability combined with economic growth, which excluding china is above the average for emerging markets. it also has solid institutions and clear rules of the game.

are investors concerned about the outcome of the election?

there are some concerns. the most important has more to do with the external situation than with chile itself. the strong commodities cycle is apparently ending and the

question is not whether commodities prices will keep rising, but when they will fall. in the Us the question is when the [Fed] tapering will start. cheap money will disappear globally and the question is when. these two trends could have an impact on a country like chile that is open to the world.

But if you look at chile’s current account and its level of savings, and the fact it is a net creditor with respect to the rest of the world, i think chile is well positioned to face this cycle that will not be as benign as in the last ten years.

From the political side, it’s difficult to imagine radical changes in the way the economy and government is administered. Even though there are some things to improve, the economic model is widely accepted in terms of the role played by the private sector in the development of the economy and the role of the government and institutions. But there are challenges from the point of view of how to improve income distribution so more people benefit from economic growth. the other thing is that the most likely winner, michelle Bachelet, has been president before and you can see what her policies were.

What about the tax reform proposal?We’ll have to see how this evolves. obviously an increase

in taxes has an impact on the value of companies, but the critical thing is to keep the economy growing at a high rate. that means investment, but to invest you need clear rules especially in terms of long-term investments. to finance these investments it is important to keep promoting long-term saving, which is where pensions and asset management comes in. i think the candidates understand these things that are necessary for investment in chile.

is the pension system in need of reform?the system is good but needs improvement. defined

benefit systems [whereby the working population pays the pensions of those who have retired] belong in the past because they are all bankrupt. this has to do with an aging population and a falling birth rate, which means the proportion of the population that is active is shrinking. the only way to resolve this problem is through a defined contribution system [based on individual contributions]. there is a consensus on this in chile and, increasingly, in the rest of the world.

But the system does need improvements. When it was

By Julian Dowling

p

InTErvIEw


created the economic and demographic situation was very different, now people are living longer. the only solution is voluntary mechanisms for people to save more. it’s also important to improve the apVc (collective Voluntary pension savings) mechanism [whereby employers complement their employees’ contributions], which allows the middle class to save more. the state also has to protect those who don’t have stable employment through the solidarity pillar.

Chile’s pension funds are internationally diversified but there are restrictions on foreign investment. Do the rules need to be changed?

pension and mutual funds have very diversified portfolios where the percentage represented by chile is much less than 10 or 15 years ago. But the investment rules should be more flexible and the regulations should be much simpler.

in what way?there are a series of limitations on individual investment

instruments. When you combine different assets the important thing is the risk/return ratio in your portfolio and it doesn’t make sense to put restrictions on each investment. there is an opportunity to simplify regulation without increasing risk in the portfolio to allow for more efficient administration.

What issues could be important at the next Chile Day?chile has been able to differentiate itself from its neighbors

and is doing things reasonably well. But the big opportunity is to work on making chile into a financial center for latin america. chile can’t be a london, but it could be singapore. singapore made a decision to be a financial center for the region and created the mechanisms and incentives for asset managers to become established in that country. chile has the ingredients, but first we need the vision that it can be done and secondly concrete measures to make it happen. i would like to see this on the agenda at the next chile day.

should Chile aspire to this goal while income inequality remains a problem?

one of the ways to improve income distribution is strongly based on economic growth and improving the quality of education. these are the two areas where investment should be concentrated so people can have a better quality of life. chilebUSiness


Rock OnBy santiago eneldo

y wonderful mother and her friends were very keen on “growing old gracefully” and, by and large, they did just that! a very anglo-saxon approach to aging: very proud and determined not to “be a bother”.

they are now mostly just history but we can learn from them, well maybe i can learn from them.

i keep being told to “act my age” and i find this extremely difficult because i can only “be the age i feel”. as i feel young and virile (well relatively), i still try to do everything as if i was not just “young at heart” but young in body as well. this causes all sorts of drama…

For example, i like to stay (very) late at weddings which, in chile, go on until sunrise or until there is simply nothing left to drink except water. i have just bought myself a new road bike and my family insists that this is “suicide on two wheels”. Unlike most chileans i do not believe the ski season ends with the independence day celebrations (september 18th); i believe the season ends when there is no more snow! the ski centers have to close when their passenger flow (or snow line) gets below a certain point but where there is snow there is skiing. i will be climbing a (relatively) high mountain in december. in august i was camping out at -15ºc. am i tough? no way! i like my “creature comforts” but i also love the adrenaline rush that comes with a great downhill run.

ah, but you have no idea how old i am... Here’s a clue: i have three years on Bruce springsteen – what a guy! if you were in santiago on september 12 and missed his concert then you missed something quite extraordinary. not just great music but a 64-year old teenager performing as if it was his debut. three and a half hours and he never left the stage. at midnight his appreciative audience, including my son and i, were ready to say thank you and goodnight; but not Bruce – not the Boss. His encore lasted another hour! He would not let us go; HE wanted to give more and

for his last two songs he was alone on stage, his 16 strong “band” having gone back to the Hyatt. i got to bed at 2:30am!

i want to live like the Boss and give it all i’ve got… right up to the end. no “growing old gracefully” for me. this brings me to a second issue: organ donation. Under a new law we in chile are all donors unless we sign a notarized affidavit declining to give up our organs for a good cause – such as saving another life. Well, let me give you this straight: i am delighted to let others make the best possible use of my organs once i have no further use for them – as in “definitely dead”, no pulse, departed, an absolute goner… However, my master plan is to ensure that my generosity will be rejected on the grounds of “organs of no value”. Yes, like the Boss perhaps, i plan to keep on going for as long as i can. i will max out on all the activities i have access to and when i am finally done you can auction off the remains.

please do not think i am being arrogant or selfish or a prima donna. i just want to squeeze the very best out of life because you never know when… so, for all you people worried about your retirement fund and legacies for the grandchildren, forget it and liVE BiG.

rock on and on and on…

i remain destined for greatness – in my own mind.

santiago eneldo,

(living big recommendations available at [email protected])

life in the Slow lane

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