Talking Points Fundación DOM Cabral
Foreign policy continues to have the same historic and traditional role: being an effective tool to support national interests and meeting the country´s objectives.
In our case we pursue the following goals:
- Becoming a developed country by 2018 (for example, to a similar level of Portugal's current GDP per capita - US$ 14,000 to U$22,000)
- Overcoming poverty - decreasing inequality
(In Chile roughly 14 percent of the population fall below the poverty line) - Living in peace and being able to contribute to the international community
This will mean an explosive increase in opportunities for our citizens.
The difference is that the world we face today has changed dramatically over the past decades and keeps changing every minute. There are four key points that show the change we have experienced:
1.- From the bipolar world of the Cold War and the past decade´s almost unipolar scheme, to the birth of a new multipolar international order.
New key players have emerged in the international scenario (Brazil, India and China).
The projection indicates that by 2030 the four BRIC countries (the ones I mentioned before plus Russia) will represent one third of global output and that by 2020 the BRICs will be among the top ten countries with larger GDP. In addition to this group, we should consider countries like Turkey, Indonesia and Mexico, which are becoming increasingly important.
Moreover, the projection indicates that by 2050 the current emerging countries will have a 50 percent larger GDP than those members of the G7.
Let me give the last example about the shifting in the balance of global power: Asia, excluding Japan, will have a GDP larger than Europe in 2025.
This scenario has been and will continue to be very positive for Latin America, since Asia is the greatest buyer of raw materials and food worldwide.
Over the last 10 years, South American exports to China have grown by 2,000 percent, more than any other region in the world.
This is of extreme importance to Chile given that 45 percent of our total exports are destined to Asia (25 percent to Europe, 15 percent to the United States). We are a country that depends entirely on foreign trade (60 percent of GDP in 2009, and more than 70 percent in 2008, compared with only 18 percent for Brazil).
2.- The international decision-making process is more multilateral and decisions are made by broader circles of power.
A concrete expression of this multilateralism is the transition from the G8 to the G20.
The consolidation of all kinds of regional groups (Mercosur, EU, Asean + 6, Arab League). The challenge for multilateral diplomacy is how to build collective solutions for collective problems in an ever more complex world.
However, more key players in the international arena necessarily mean a more complex decision-making process. This can clearly be observed in political matters (Iran, Honduras, Middle East), international trade (future of the Doha Round) and environmental issues (climate change, whale hunting).
Therefore, bilateral relations are more important than ever. The challenge posed by the international scenario is how to develop a closer relationship with a larger group of relevant countries.
3.- The nature of conflicts and threats to international peace has changed.
Nowadays, Latin America presents a triad (in almost all countries in the region) consisting in democracy, legal certainty and freedom of enterprise, which in turn create a virtuous circle of progress and consolidation of civil liberties. How difficult it was for us to combine these three elements!
There are no wars between states in Latin America and there is a very low probability of having one in the future. However, we still have some border issues, like the maritime dispute between Chile and Peru, and the environmental disagreement between Argentina and Uruguay (Rio La Plata waters), which have been filed with the International Court of Justice.
Our region gave a solid example of commitment to peace by declaring itself as a Nuclear-Weapon-Free Zone. (Tlatelolco Treaty in 1968).
Nevertheless, new threats have emerged in recent years:
Terrorism, drug trafficking, and other forms of international organized crime such as human trafficking and child labor pose a greater challenge to the international community, particularly when these threats are mixed with other phenomena like guerrillas, paramilitary, and all kinds of radical groups.
4.- The most significant change in recent history: a globalized, interdependent and connected world.
To set an example, the position of Foreign Secretary in the United Kingdom was created in 1774, and it took 30 years for a British foreign minister to go abroad to meet with his counterparts. He attended the Congress of Vienna in 1814.
In the sixties, former Chilean President Eduardo Frei Montalva could not carry out a presidential tour of the U.S. because the Congress didn't authorize it.
Nowadays this would be unthinkable. There are several multilateral groups and bilateral relations are more direct and significant than ever. Foreign ministers are always on a plane (sometimes I think I live at an airport, like in that Tom Hanks movie), talking to each other or sending e-mails to fellow ministers.
Today presidential diplomacy and having an active international agenda is part of the job of any country's leader.
But today not only countries are important. We have many non-state international stakeholders, from multinational companies, environmental and human rights organizations with global networks (Human Rights Watch, Greenpeace, etc.) that challenge governments. But not only organizations, also common people like bloggers and twitterers. Just think about Yoani Sánchez, the Cuban blogger, whose only weapons are a computer and an Internet connection.
Both these organizations and people influence the public opinion of countries and compel them to take sides on all matters, and to be consistent with the country's values.
Faced with this globalized, interconnected and multipolar world, Chile, a small country that is very far away from the centers of power, has taken the option of seizing the opportunities this scenario provides.
a) Open unilaterally our economy: today the uniform import tariff is 6 percent, but thanks to our network of free trade agreements our real tariff is 0.6 percent with the rest of the world. We have one of the major networks of FTAs (24 agreements with 58 countries). This network includes an agreement on goods and services with China, and we will soon add agreements we are negotiating with Vietnam, Indonesia, among other countries.
Just as I mentioned upon Chile's accession to the OECD, we use the 3F approach (Fanatics for Free Trade). On that occasion, we realized we were the only member of the OECD that had a FTA with all the other member countries.
b) Our current challenge is to make a huge leap in productivity through human capital and investment. A Chilean worker has only 34 percent of the productivity of a U.S. worker.
A scholarship fund was established with US $6,000 million for postgraduate scholarships in Chile and abroad. In 10 years we expect to have 30,000 Chilean citizens with a master or a PhD degree from the best universities of the world.
(India is teaching English to 250 million secondary school and university students).
To encourage foreign investment, we provide security on both legal and tax matters (US $ 50, 000 million in mining and more than US $ 100, 000 in total in the next years). We are signing Investment Protection Agreements with many countries. We are currently negotiating with Brazil our first bilateral investment protection agreement.
c) Reinforce ProChile's work through our trade network abroad of more than 60 trade offices and add the efforts of our embassies to increase trade and attract investment.
Other countries have chosen other strategies for development and have other political ideas and we absolutely respect them. (To Chávez: Vive la difference!)
Regional integration
Moreover, we strongly support South American integration, because it is key to enable us to compete in this world and overcome multinational problems, such as drug trafficking and terrorism.
But we believe integration must be effective and efficient, and for this purpose it should be materialized in the following aspects:
a) Physical integration, like the bioceanic corridor connecting Santos-Arica- Iquique that we will inaugurate soon with President Lula. Also, the one running from Porto Alegre to the Chilean port of Coquimbo or the low-height tunnel of Cristo Redentor, the main border crossing between Chile and Argentina (currently closed 30 days per year!).
We must work to set up the terms of use of this infrastructure to ensure that it will be always open and operating.
This will not only allow us to expand the access of vast regions to the Pacific Ocean and Asia, but it will also allow us to create productive chains to take advantage of the opportunities provided by the FTAs signed by Chile;
b) Energy integration, both electrical and those of gas and oil. This will be very useful not only for consumers, but also for producing countries, but it can only be achieved as long as we are able to ensure legal certainty and supply. This applies to all kinds of investment, and 84 percent of Chilean investment is destined for Latin America;
c) Legal cooperation, in the fight against crime we must have a single voice. It can`t take years to extradite a criminal. We need to improve the security in our borders. The enemy is multinational and it needs a multinational response;
d) Support to migrants: There are 150 thousand Peruvians in Chile; 500 thousand Chileans in Argentina; 4 million Colombians in Venezuela. These citizens require health care; they need to handle their pension funds; the accreditation of professional degrees, etc;
e) Standardize defense spending in order to have real transparency in this area, and thus prevent conflicts. Also, to prevent it from becoming a weapon for domestic policy. This is the last step to put an end to the problems of the 19th century;
f) Cooperation on natural disasters (earthquakes in Haiti and Chile)
In addition, we believe it is of the outmost importance to our country to be part of global decision-making. We support the election of Brazil as a permanent member of the United Nations Security Council.
We applaud the participation of Mexico, Argentina and Brazil in the G20. We have also requested the G20 to invite the Rio Group to the next meeting in Korea, as it was done with Asians and Africans to the meeting in Toronto.
Regional bodies as UNASUR and Rio Group must allow us to unify positions on global issues.
In all these tasks Brazil's contribution is essential for its size and influence. In turn, Brazil's voice will be enhanced if it counts with regional support.
Cooperation between Chile and Brazil is very close, and I'm certain it will become even closer in the future since we share a common history, values and interests.
A clear example of this is the world's largest telescope to be built by a European consortium. Chile and Spain were candidates for its location.
Brazil joined forces with Chile, became a partner of the project and the telescope will be built in Chile. This opens up a wide field of opportunities for companies of both countries to take part in its construction.
Another example in the private sector is the merger of TAM and LAN, creating the third largest airline in the world by market value and the largest private airline worldwide. A company able to compete anywhere in the world.
I'm sure we will see many similar examples in the coming years. But I've realized that the best example of integration is in front of me. People coming from all over the world to share different views on how we can face global challenges.
Thanks