Press Release No. 04/185

Press Release: IMF Managing Director Rodrigo de Rato's Statement at the Conclusion of his Visit to Chile

September 2, 2004

International Monetary Fund (IMF) Managing Director Rodrigo de Rato made the following statement in Chile today:

"I am delighted to be here today, as part of my tour through Latin America. I also am pleased to have attended the eleventh meeting of the APEC Finance Ministers. Chile is the host country for the APEC meetings this year, which I believe reflects Chile's growing, international ties that now stretch well beyond the region. During my visit, I had the privilege to meet with President of the Central Bank Vittorio Corbo, Finance Minister Nicolás Eyzaguirre, Minister of the Interior José Miguel Insulza, and other senior government officials. It was also my pleasure to spend an informative and moving time with the people of El Gomero in Maipú, who shared their stories of how Chile Solidario has improved their lives.

"I congratulated the authorities on Chile's impressive track record of fostering growth and a commitment to strong institutions. The authorities have put in place a successful inflation targeting framework to anchor monetary policy and a credible structural balance rule to guide fiscal policy. These two pillars have been essential for Chile's economic stability. Financial markets are deep in Chile, helping to sustain economic growth. The authorities have also put in place several free trade arrangements in the past year, including those with the United States and the EU, underscoring this country's commitment to free trade.

"Sustained growth also requires an ongoing commitment to investing in a nation's public infrastructure. I am pleased to announce that the Fund is undertaking a pilot project that will study ways of increasing public investment, while keeping costs low by involving the private sector in public-private partnerships (PPPs). Chile has agreed to participate in this project, and we anticipate that Chile's long and successful track record with PPPs will serve as a role model to other countries that are struggling to boost public investment.

"In my discussions with the authorities, we agreed that a number of challenges remain. I am encouraged by the ongoing debate in Chile on policies to promote strong growth and to further reduce poverty over the medium term. Central to these efforts will be steps to enhance education and labor market flexibility. In particular, one of the main challenges will also be to ensure that the children of the poor have access to education. After meeting the people of El Gomero, I have a better understanding of how Chile Solidario is a promising program to comprehensively address poverty.

"My visit underscores the importance that the IMF places on our relationship with Chile. We believe that many countries, not just in this region but around the world, can learn from the lessons experienced here, including the importance of sound institutions and a commitment to the rule of law. The IMF looks forward to our continuing policy dialogue and providing analysis on macroeconomic and financial sector issues, supplemented by technical assistance in the Fund's areas of core expertise."