OECD economic surveys : Chile

101 Pages·2013·2.882 MB·English

by  OECD

OECD Economic Surveys O
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CHILE D
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SPECIAL FEATURES: INNOVATION AND ENTREPRENEURSHIP n
o OECD Economic Surveys
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Most recent editions u
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Australia, December 2012 Israel, December 2011 ey CHILE
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Austria, July 2013 Italy, May 2013
Belgium, May 2013 Japan, April 2013
Brazil, October 2011 Korea, April 2012
Canada, June 2012 Luxembourg, December 2012
Chile, October 2013 Mexico, May 2013
China, March 2013 Netherlands, June 2012
Colombia, January 2013 New Zealand, June 2013
Czech Republic, November 2011 Norway, February 2012 V OCTOBER 2013
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Denmark, January 2012 Poland, March 2012
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Estonia, October 2012 Portugal, July 2012 m
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Euro area, March 2012 Russian Federation, December 2011 2
European Union, March 2012 Slovak Republic, December 2012 0
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Finland, February 2012 Slovenia, April 2013 3
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France, March 2013 South Africa, March 2013 6

Germany, February 2012 Spain, November 2012
Greece, August 2011 Sweden, December 2012
Hungary, March 2012 Switzerland, January 2012
Iceland, June 2013 Turkey, July 2012
India, June 2011 United Kingdom, February 2013
Indonesia, September 2012 United States, June 2012
Ireland, September 2013
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Consult this publication on line at http://dx.doi.org/10.1787/eco_surveys-chl-2013-en. IL
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ISSN 0376-6438
Volume 2013/16
2013 SUBSCRIPTION (18 ISSUES)
October 2013 ISSN 1995-378X
SUBSCRIPTION BY COUNTRY
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ISBN 978-92-64-18312-4 9HSTCQE*bidbce+ c
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10 2013 15 1 P o
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102013151cov.indd 1 19-Sep-2013 2:42:32 PM

OECD Economic Surveys:
Chile
2013
This document and any map included herein are without prejudice to the status of or
sovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundaries
andtothenameofanyterritory,cityorarea.
Pleasecitethispublicationas:
OECD(2013),OECDEconomicSurveys:Chile2013,OECDPublishing.
http://dx.doi.org/10.1787/eco_surveys-chl-2013-en
ISBN978-92-64-18312-4(print)
ISBN978-92-64-18313-1(PDF)
Series:OECDEconomicSurveys
ISSN0376-6438(print)
ISSN1609-7513(online)
OECDEconomicSurveys:Chile
ISSN1995-378X(print)
ISSN1999-0847(online)
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TABLEOFCONTENTS
Table of contents
Executivesummary......................................................... 7
Assessmentandrecommendations .......................................... 11
Macroeconomicdevelopmentsandtheoutlook ............................. 12
Strengtheninggreengrowth ............................................. 24
Labourmarketinclusiveness ............................................. 27
Boostinggrowththroughentrepreneurshipandinnovation .................. 34
Bibliography............................................................ 38
AnnexA.1.Progressinstructuralreform.................................... 41
Chapter1.Makingthelabourmarketmoreinclusive ............................ 47
Overviewofrecentlabourmarketdevelopmentsandchallenges .............. 48
Supportinggreaterfemalelabourforceparticipation ........................ 53
Helpingtheyoungtransitionfromstudytowork............................ 61
Thelowskilledneedhelptoimprovetheirskillsandfindbetterjobs........... 67
Bibliography ........................................................... 74
Chapter2.Boostinggrowththroughinnovationandentrepreneurship............. 77
BusinesssectorR&Dintensityremainslow................................. 81
Policyreformshaveimprovedtheclimateforentrepreneurship ............... 84
Simplifyingbusinessexit ................................................ 88
Expandingsuccessfulinnovationpromotionprogrammes .................... 90
Ashortageofqualifiedresearcherspersists ................................ 91
Bibliography............................................................ 94
Annex2.A1 ............................................................. 96
Boxes
1. Mainrecommendationsonmacroeconomicpolicies ..................... 24
2. Mainrecommendationsongreengrowth ............................... 27
3. Mainrecommendationsonlabourmarkets.............................. 34
4. Mainrecommendationsonentrepreneurshipandinnovation.............. 38
1.1. InsightsfromChile’sELPISurvey ...................................... 58
1.2. Chile’splanstoreformitspublictrainingsystem ........................ 68
1.3. Displacedworkersneedinghelptogetbacktowork ..................... 71
1.4. Recommendationstoimprovelabourmarketinclusiveness ............... 74
2.1. Stylisedscenariosforcopperproductionandlong-rungrowthinChile...... 80
2.2. Start-upChile....................................................... 85
2.3. Recommendationsonentrepreneurshipandinnovation .................. 93
OECDECONOMICSURVEYS:CHILE©OECD2013 3
TABLEOFCONTENTS
Tables
1. Macroeconomicindicatorsandprojections.............................. 13
2. Financialindicators.................................................. 18
3. Personalincometaxstructure......................................... 23
1.1. Summaryoflabourmarketandtrainingprogrammesandrecommendations 54
1.2. Estimatesofthedeterminantsofmothers’labourforceparticipationinChile 59
2.1. Ventureandseedcapitalfunding ...................................... 85
2.2. Summaryofgovernmentinitiativesrelatedtostart-upfunding,2000-12 .... 86
2.A1.1. Mainpolicytoolstopromoteinnovativebusinesses ...................... 96
Figures
1. TheOECDBetterLifeIndexshowsamixedpicture ....................... 11
2. Potentialgrowthandtheoutputgap ................................... 12
3. Thecurrentaccountbalanceandcapitalinflows......................... 14
4. Inflationandlabourcosts............................................. 15
5. Exchangeratedevelopments.......................................... 17
6. Fiscalpolicyandcopperprice ......................................... 20
7. Taxincidencebyhouseholdincomedecile .............................. 23
8. CO pricesimplicitindieselandpetrolexcisetaxesafteradjustingfor
2
externalities ........................................................ 25
9. Employmentgrowthandtheunemploymentrate........................ 27
10. Youngpeopleandwomeninthelabourmarket ......................... 28
11. Bringingmorewomenintothelabourforcecanhelptosustainlabour
supplyinChile...................................................... 29
12. Coverageofearlychildhoodeducationandcare ......................... 30
13. ProductivityandGDPpercapitagrowth................................. 34
14. R&Dintensityislow,especiallyinthebusinesssector .................... 35
1.1. Labourmarketperformance........................................... 48
1.2. Bringingmorewomenintothelabourforcecouldhelptosustainlabour
supplyinChile...................................................... 50
1.3. Disposableincomeinequalityhasfallenbutisstillveryhigh .............. 51
1.4. Labourforceparticipationratesbyagegroupandgender,2012 ............ 52
1.5. Youngpeopleandwomeninthelabourmarket ......................... 53
1.6. Coverageofearlychildhoodeducationandcare ......................... 57
1.7. Reasonsfornotbeinginthelabourforceamongsurveyedmothers ........ 58
1.8. Percentageof25-64year-oldsinemployment,byeducationalattainment
level(2011) ......................................................... 62
1.9. Combiningstudyandworkcanbeaneffectivepathwaytoenter
thelabourmarket ................................................... 65
1.10. Theeffectoftheproposedunemploymentbenefitreformonreplacement
rates(netoftaxes),2011.............................................. 70
1.11. Displacementratesbyworkers’characteristics .......................... 71
1.12. Reemploymentrateswithinayearafterdisplacement
byworkers’characteristics............................................ 72
2.1. ProductivityandGDPpercapitagrowth................................. 78
2.2. Totalfactorproductivity(TFP)estimatesexcludingtheminingsector....... 79
2.3. Long-termgrowthscenarios .......................................... 81
2.4. R&Dintensityislow,especiallyinthebusinesssector .................... 82
4 OECDECONOMICSURVEYS:CHILE©OECD2013
TABLEOFCONTENTS
2.5. R&Dtaxsubsidycertifications......................................... 83
2.6. Overviewofpolicytoolstopromoteinnovativebusinesses ................ 88
2.7. Bankruptciesareunresponsivetothebusinesscycle ..................... 89
2.8. Organisationoftheinnovationsystem ................................. 91
2.9. IncreasinginvestmentinadvancedstudiesshouldincreaseoutputofPhDs . 92
2.10. Evolutionofmaster’sstudentcompletion............................... 92
This Survey is published on the responsibility of the Economic and
Development Review Committee of the OECD, which is charged with the
examinationoftheeconomicsituationofmembercountries.
The economic situation and policies of Chile were reviewed by the Committee
on 25September2013. The draft report was then revised in the light of the
discussionsandgivenfinalapprovalastheagreedreportofthewholeCommitteeon
4October2013.
The Secretariat’s draft report was prepared for the Committee by Sean
Dougherty, Aida Caldera Sánchez, Carla Valdivia de Richter and Nicola Brandt,
with statistical assistance from Roselyne Jamin and Valery Dugain, under the
supervisionofPatrickLenain.
ThepreviousSurveyofChilewasissuedinJanuary2012.
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OECDECONOMICSURVEYS:CHILE©OECD2013 5
BASICSTATISTICSOFCHILE,2012
(NumbersinparenthesesrefertotheOECDaverage)a
LAND,PEOPLEANDELECTORALCYCLE
Population(million) 17.4 Populationdensityperkm² 23.0 (34.3)
Under15(%) 21.8 (18.1)Lifeexpectancy(years,2011) 78.3 (80.0)
Over65(%) 9.5 (15.3) Males 75.7 (77.3)
Foreign-born(%,2010) 2.1 Females 81.0 (82.8)
Latest5-yearaveragegrowth(%) 1.0 (0.6)Lastgeneralelection January2010
ECONOMY
Grossdomesticproduct(GDP) Valueaddedshares(%,2011)
Incurrentprices(billionUSD) 268.6 Primary 3.4 (2.5)
Incurrentprices(billionCLP) 130526.9 Industryincludingconstruction 39.1 (27.7)
Latest5-yearaveragerealgrowth(%) 3.8 (0.6) Services 57.5 (69.8)
Percapita,PPP(thousandUSD) 22.4 (37.1)
GENERALGOVERNMENT
PercentofGDP
Expenditureb 21.5 (42.8)Grossfinancialdebtb 12.2 (102.4)
Revenueb 22.0 (36.2)Netfinancialdebtb -6.9 (65.6)
EXTERNALACCOUNTS
Exchangerated(CLPperUSD) 486.8 Mainexports(%oftotalmerchandiseexports)
PPPconversionrate(USD=1) 334.2 Manufacturedgoods 38.0
InpercentofGDP Crudematerials,inedible,exceptfuels 31.3
Exportsofgoodsandservices 34.2 (53.6) Foodandliveanimals 15.7
Importsofgoodsandservices 33.9 (50.1)Mainimports(%oftotalmerchandiseimports)
Currentaccountbalance -3.5 (-0.4) Machineryandtransportequipment 36.6
Netinternationalinvestmentposition(2011) -9.5 Mineralfuels,lubricantsandrelatedmaterials 22.6
Manufacturedgoods 11.2
LABOURMARKET,SKILLSANDINNOVATION
Employmentrate(%)for15-64yearolds 61.8 (65.0)Unemploymentrate(%) 6.4 (7.9)
Males 73.6 (73.1) Youth(%) 16.3 (16.2)
Females 50.2 (57.0)
Averageworkedhoursperyear 2029 (1766)Tertiaryeducationalattainment
GrossdomesticexpenditureonR&D 25-64year-olds(%,2011) 28.9 (31.5)
(%ofGDP,2010)b 0.4 (2.4)
ENVIRONMENT
Totalprimaryenergysupplypercapita(toe) 1.9 (4.2)CO emissionsfromfuelcombustion
2
Renewables(%oftotalprimary percapita(tonnes,2010) 4.1 (10.1)
energysupply) 24.2 (8.5)Waterabstractionspercapita(1000m3,2007) 2.2
Fineparticulatematterconcentrationc Municipalwastepercapitac(tonnes,2009) 0.4 (0.5)
(urban,PM10,µg/m3,2011) 55.0 (20.1)
SOCIETY
Incomeinequality(Ginicoefficient,2011) 0.501 (0.304)Educationoutcomes(PISAscore,2009)
Relativepovertyratec(%,2009) 30.2 (23.0) Reading 449 (493)
Publicandprivatespending(%ofGDP) Mathematics 421 (496)
Healthcareb 7.6 (9.5) Science 447 (501)
Pensions(2009) 5.0 (8.7)Shareofwomeninparliament(%,July2013) 13.9 (25.8)
Education(excludingtertiary,2010) 3.4 (4.0)Netofficialdevelopmentassistance
(%ofGNI) 0.0 (0.4)
Betterlifeindex:www.oecdbetterlifeindex.org
a) WheretheOECDaggregateisnotprovidedinthesourcedatabase,asimpleOECDaverageoflatestavailabledataiscalculatedwhere
dataexistsforatleast29membercountries.
b) 2011fortheOECD.
c) 2010fortheOECD.
d) Periodaveragefor2012.TheSPOTpriceon1October2013is502.83.
Source: Calculationsbasedondataextractedfromthedatabasesofthefollowingorganisations:OECD,InternationalEnergyAgency,
WorldBank,InternationalMonetaryFund,Inter-ParliamentaryUnionandCentralBankofChile.
OECDEconomicSurveys:Chile2013
©OECD2013
Executive summary
7
EXECUTIVESUMMARY
Main findings
Sustainingrapidgrowth
Soundmacroeconomicpoliciesandacommoditypriceboomhaveyieldedanenviablylong
phaseofeconomicgrowthandjobcreation.Thebankingsystemishealthy,andthestrong
government financial position has been rewarded by low sovereign spreads and credit
rating upgrades. The economy is projected to continue growing at a healthy pace.
Historically-low unemployment has resulted in some labour-market tightness, but
inflation remains contained. Strong domestic demand and weakening foreign markets
have pushed the current account balance into deficit, which has been financed mostly
throughFDI,thuslimitingtheriskofcapitalflowreversals.Downsideriskstogrowthcould
emergemainlyfromasharperfallinthecopperprice.Inflationarypressurescouldalsobe
reignited by the tight labour market. Monetary and fiscal policies are well positioned to
addresstheseshort-termrisks,withthehelpofthefloatingexchangerate.
Strengtheninggreengrowth
Strong economic growth with heavy reliance on natural resources has come at a cost for
the environment, notably air quality and in some areas water availability. The use of
renewableenergysourcesishigh,yetthisislimitedprimarilytohydropower,andenergy
needsaremettoasignificantdegreebyimportedfossilfuels.Mechanismstointernalise
environmental externalities and to promote green innovation and technology adoption
haveimproved,butremaininsufficient.Energytaxesdonotadequatelycoverexternalities,
especially for energy use outside the transport sector and diesel.There is scope for the
mining sector to continue reducing its large amounts of local emissions and soil
contamination.
Makinglabourmarketsmoreinclusive
Economicgrowthandrecentpolicyreformshaveincreasedemployment,reducedpoverty
andloweredincomeinequality,thoughthelatterremainshigh.Womenandyoungpeople
haveenteredthelabourforceingreaternumbers,buttheirparticipationratesremainlow
comparedtomostOECDandLatinAmericancountries.Attitudestowardswomen’swork
and childcare commitments, as well as regulations regarding childcare provision, pose a
barriertofemaleemployment,thoughprogressisunderway.Overalleducationqualityand
access to higher education have improved, but early stages of compulsory schooling
remain the priority. Among low-skilled workers, a high minimum wage and strong
employment protection hamper access to the job market, and the public employment
servicesandtrainingsystemsareunderdeveloped.
Boostingentrepreneurshipandinnovation
Growthhasbeendrivenlargelybyfactoraccumulationoverthepastdecade,thoughthere
are signs that productivity growth has picked up recently. Business R&D intensity is low,
innovative outputs have been weak and technological progress has suffered from a
shortage of qualified STEM graduates. Policy settings have become more supportive of
innovation recently, with reforms making it easier and faster to open a business and to
access financing. Notably, Start-up Chile has attracted international attention as a way to
foster entrepreneurship. Chilean firms have become more innovative, including in
traditional sectors centred on comparative advantages and natural resources. The
underusedR&Dtaxcredithasbeenmadeeasiertoclaim,anditstake-upisnowincreasing.
Still,thereisscopetofurtherexpandtheinnovationsystem,improveexistingprogrammes
andstrengtheninstitutionalcoherence.
8 OECDECONOMICSURVEYS:CHILE©OECD2013