Although Ricardo Ffrench-Davis (85) is about to turn 60 years of career, one that began when he returned from his studies at the University of Chicago, remains very active labor and academically.Of course, he recognizes, he gets tired much more.

"It is not the same to have 80 to have 85."

And what these days have been busy: it has had to make its routine compatible with integrating the economic advisory council of the elected president Gabriel Boric, the team that delivered advice to strengthen aspects in this subject to the campaign of the front -world.

In addition, he was imbued in writing a new book, which was delayed by social outbreak and pandemic.

In December, Ffrench-Davis began a period of silence towards the press that ended with this interview ceded to Radio Bío Bío, in which he analyzed some of the key points that the new government that will assume this March 11 will have to face.

Have you contacted the president -elect?

"Nope.The only time I was with him was in a panel at the Chile 21 Foundation. And he was not yet the presidential candidate.Therefore, I have not spoken with the president -elect after the second round.But we talked several times with the Economic Advisory Council, in which I was very pleased to participate when they called me. ”

Did they contact him after the second round?

“After the Puerto Rican pass to the first round we met the first days, several times in the week.We were dedicated to reading, listening and participating with some of the Puerto Rican economists with whom one has contact from before.I am a friend of some of them, I will not mention names.Then, we communicated during the campaign and before it. ”

You sound a lot to be Minister of Finance.Are you willing to take that position?

“It would be out of focus that an 85 -year -old person, even if he is an ultra health superman, at that age he takes a task that is 24 hours a day.It does not correspond.Not that I say I refuse.It would seem out of focus that someone can think of me.That person can read of me and say ‘what a fantastic, what a good idea, how brilliant this person’, and then he looks at my year of birth, and then says ‘ah, pucha, it can't be’.At 85, it makes no sense.I can't do things I did at 80. ”

But do you feel able to do the job?

“At this point, I think not.One has to be realistic.I will turn 60 years of professional career in March.And I'm happy.My life is finishing.But I can still give advice, happy. ”

Doesn't you rule out a councilor position at the Treasury?

“Of course, but if one says it, it is already being offered.But they know that I have been an available guy for the Chilean service.And I think Boric is the one who can save us, because he is the president -elect.He has in his hands the tremendously difficult possibility to save him.And delighted to be able to collaborate in that.Someone could say ‘this rooster is candidate to be a member of the Advisory Committee’, and I'm not in that wave. ”

So, what name would I let it take command in the Treasury?

“I must not give names.But I talked to names.To those people, whether they are a man or woman, I have advised them.But it does not correspond to names.I think entertain.And I want to clear things. ”

Reforms

Many economists predicted that the dollar after the triumph of Boric would reach the floor of the $ 900, but touched the $ 880 and today is declining.Will the dollar be kept on the floor of $ 900?

“First, one must be aware that current exchange policy is intensely unstable.That is horrificly negative for employment, for productive development and for the added value of exports.It is tremendous damage caused by an exchange rate managed by financial speculation. ”

“This must be corrected if we want to have a growth with inclusion.This is one of the instruments to achieve growth, not the only one.But this is damaging our employment and our inclusion.Speculation damages equity.It is deeply regressive.They win a few because they beat others.They did not contribute to the product, but they were removed. ”

“Then, we do not keep ourselves for the price of the dollar as an indicator of our future.Unless that, if that is still present, will be bad for our future.That is the clear signal.It is bad for our future if we continue with this. ”

“But now we will be subject to the statements.The name of the minister comes out this or that, he can go up or can go down.It is a relationship.And the important thing is that the exchange rate reflects the economic reality of the country.And the economic reality is not right. ”

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Do you see that the dollar reaches that floor of $ 900?

“It's possible, because we were very close.Then, one more push is enough.And this is that dozens of millions of dollars appear that day, or leave that day.And a great leap is hit.Because it is balancing in the short term. ”

And what will happen to the dollar in the future?

“We want the dollar to reflect the medium term balance.Not that of length, because many things change in 30 years.But reflect the balance of the three, four or five years.That gives a signal to the producing and consumers. ”

“This is sustainable in the coming years.And it is very important that, if the sustainable is changing, you are changing the exchange policy of the central bank and you adjust the exchange rate.If our productivity grows in relation to countries that are our commercial partners, we can have a cheaper dollar. ”

“But we have many challenges inside the country.Those are more difficult to do.The exchange policy would change it in an hour.Instead, to change productive development you need years, but we have to leave early on March 11.And the government is putting stumbling on that, with the guaranteed pension without approved financing.In the same second, he is putting another great lock to the construction tasks of the future, which go through a better job.People cannot live from government donations. ”

What do you think of the Universal IFE?

“I am in favor of a selective IFE.You have to give money to those who need it, and concentrate your silvers on giving people employability.A employment subsidy.A labor IFE.It can improve?Yes. But you have to use silver in that and not distribute checks when we already have an economy in which the sum of checks is already very large.We have more distributed checks than what is to distribute.That manifests itself in inflation.We have to distribute to those who have not arrived, that there are many people. ”

“There are 500 thousand people without employment.Yes, provided that in Chile the number of citizens with more than 18 years that are available to work and that did not work had not increased.And those people are many people.According to the figures, if the workforce increased by 5% since 2018, there are 500 thousand people.If we add the 400 thousand people who have no job today, there are 900 thousand people: 900 thousand jobs to generate today.That is tremendously difficult to correct. ”

“We call that the productive transformation, of which Yasna Provoste's candidacy and Gabriel Boric spoke, but they deepened little.You have to deepen it.You have to work it. ”

“We have to put him.You have to emphasize it.It is not enough to say: you have to do.Employability conditions must be generated.And that happens to make reforms.For example: systematic support for SMEs.Do not give them money, but that conditions are better, so that they have more trained workers. ”

“That messages must be put on one of those large light signs: a great transformation of the Chilean training system comes.How we assign the silver, how we handle them and how we train for the future.It is ultra difficult to do it.Europeans did it in the postwar period.The South Koreans in the 1960s and 1970s. The Taiwanese and Malaysians did it.And could make productive transformations. ”

What is the first thing the country has to do since March 11?

“Employment is very essential.It is not a matter of cutting the hours of work with the bad work situation we have.Nor to raise the minimum salary.No. The first thing to do is improve people's employability.Between 500 and 1 million people do not have a good job or rightly has no job.Or is doing something informal that is not registered, that sells things on the street or in the subway.That is a lousy employment.He is winning without contributing to the welfare of the country.We need formal employment and trade.That must be enlarged. ”

“Another point: 2%GDP must be ensured.We have no sure if we look where we are today: we have less production by member of the population of working age than what we had in 2018 and 2019. We have much more commerce, more services, but less available goods.Less agricultural, miners and industrial goods ”.

“We also have less good quality schools.There are deteriorated and underdeveloped children's gardens that have lost during these two years.We are behind those things.Those are real things.There it has to be real.Universal kindergarten for all children. ”

Is there an excess of expense?

“We have an excess of expense.You have to reallocate it.You have to create production capacity.You don't have to reactivate demand, for God's!And if you are going to do it, do it selective.For example, in the hotel sector, which will be very difficult, with the omicron variant.But we must encourage consumption in spoile areas.Not in general. ”

“You have to understand that growth is not born in the rich.Born in the 10 million members of the workforce, or the 9 million now.They do it.That is the whole population.There, it helps.But it helps those below.Do not spend the money on those above, but on those below.Giving them training.Training to precarious SMEs.We must improve job training and policies for helping SMEs, with medium -term credits and reasonable interest rates, for the reactivation of small businesses. ”

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“In addition, SMEs must do their jobs calm, safely: without stolen, or assaulting them.We have to give security to those producers.That is another giant task.Personal security in the streets and business of the country ”.

Pensions and minimum salary

Does a minimum wage of 500 thousand pesos and a weekly 40 -hour workday consider unrealizable?

“The right thing is to think about it.Let's try to have it in four more years.Do not create the hopes that it comes now.And some things can be done very gradually, such as the 500 thousand pesos of minimum wage.But it is more complicated to reduce the working day to 40 hours per week.It can depend on the type of company, but you cannot make all companies make an hour less.It's very complicated.There is a technical complication, it would be, in that. ”

“The $ 500,000 minimum salary is a financial complication.You can't, but maybe $ 370 or $ 380 thousand.There are many SMEs that have one or two jobs.Up to ten, which is a crowd, a very large number.That must be worked with our feet on the ground, so that we have effectively better employment, not only for those who are already employed, but for those who have no job, and we do not believe unemployed. ”

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“You have to have your feet on the ground: graduality.And think about what it means to this, what happens to the interior of companies, before making the decision.To do the majority of Chileans well and reduce the distance.Do not enlarge the distances, because it creates less employability.Acort them, because you will be giving more employability to those who had no job, or had a very bad one.That is the construction of the future, and that is what we call productive transformation. ”

In that case, you consider a SME better with two jobs with the current minimum to only one job with 500 thousand pesos of salary.

"Of course.The gradualities that the president -elect has transmitted must be put not only heart, but brain in how we do it effectively.What is the gradualness that he gives us more instead of giving us less. ”

The elected president Boric proposes pensions at 250 thousand pesos next to the end of the AFPs.Is this supported by considering the inverted pyramid of the population?

“What I have understood about Puerto of and his representatives say clearly: gradualness.And the theme of the end of the AFP is the AFP as the heart of the Social Security system.That the heart becomes the new system, with the solidarity component. ”

“But I give my recommendation: I don't eat nonsense that can make you impossible for the transforming tasks of this country.Think: the most important thing is transformative tasks.The transformer is not to close something that exists, which has not been good in the average, but that closing it can create a brutal disruption in your economic system.Close a system that manages $ 170 billion currently, and make it happen to other hands, it would be a fatal mistake. ”

“You can hate AFPs, but if you love Chile more than what you hate at AFP, don't make such a brutal nonsense to close them.Leave it there.And the new silver, that goes to a new system.But it begins to regulate how it manages it.There is the superintendence of pensions for that.You can change the proportions of where the silver, and so on.That is in your hands.But make gradual changes.Because the financial system is prone to sudden changes.And you give it a signal and you are going to make a brutal run in the financial system.And that ties your hands as a government.Don't be ... inexperienced.I use that word not to say ‘leso’ or ‘gross’.Do not fall into an explosive trap.It would be a trap. "

“People who want to get out of AFPs and come to the new system, to do so.The new silvers come here, but the new ones.And the $ 170 billion leaves them there and you are driving intelligently as the new system is transformed into the predominant, because the silver accumulates. ”

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How much should the price percentage of each worker increase?

“I hope it is more than 6% that is very little, and approaches 8% or 10%, which resembles the average of developed countries, which are more in 19% or 20%.And also gradually, because that someone pays it.And the company pays. ”

“And some companies, the big ones, have no difficulty paying it.Large companies use very few workers per million of capital.Copper mining produces 10% of GDP, and uses 2% of the workforce. ”

What percentage proposes that the employer and the worker come?

“It is curious that those who are economists say that will make a big difference.In the third or fourth year what you say do not make a difference.The market adjusts.But at the beginning of the first year it makes all the difference, when you say ‘the employer pays it from now on,’ the employer is paying now.But in the next readjustment. ”

“I would reach 8% of the employer's contribution and leave the current 10% of the worker, who is also paying the employer.That makes it gradual, and that this distribution of funds goes to capitalization, another for the current retirees.And the AFP is still there, the $ 170 billion. ”

“Because, if 170 billion dollars were transferred, they would go to a tender with other private administrators.What will change in terms of investment quality?It will go from private administrators who live in financial investment, to other private administrators who live in the same.But they change hand 170 billion dollars.That creates a disruption in the transition to do the same: bad.That is a brutality.When they say, all this goes to state hands.Already, tolerable.But if they tell me that they go to other administrators that come from financial investment, not productive, not the long -term credit for productive development, for infrastructure, for SMEs that invest at 20 or 30 years, no.Transfer them to financial administrators is to shoot at the feet. ”

Road to development

How many years can we foresee with a mixed model, the AFP running model and the new model?

“If we want to go to the world of development, let's look at the developed world.Pure cast systems are unsustainable.The country's age transition makes the financing of the old for young people unsustainable, when the old ones are going to be two or three times the young.If they are three times, well, they will be able to receive pensions that are a third of the salaries of young people, which are lower than those of median and high age.We would have very bad pensions.You have to have a combination of the two.And I have understood him about Boric, Jackson and Cariola very good messages: we need contributory contributions.And those are there in the current 10%.Those who want to move to this, but continue to capitalize on their account.I believe that people do not understand the notional accounts.It is for very trained people in the financial system. ”

This solidarity system proposes that you continue to capitalize on par, that it will continue to be reinviring.

“There are a part of the silver that reinveys and capitalized, and another part will compensate for low pensions.It is added to the contributory, but much more to solidarity pensions.Therefore, you have a mixture of the system that have some developed economies, and others that are moving away from the cast and advancing towards contributory and supportive components. ”

How long will the AFPs and the social model live together?

“Do not ask me what we will do 20 years.I tell you what we do 4 years.And at 4 years, keep the 10% contribution in the AFP and open the door for which he wants, he moves to the new system to a state investment fund, of which I am very supportive, so that those silver will finance the developmentproductive.And that is employment.All this is related.You have to do many things to have a better country, make the leap that countries destroyed by World War II.And they made a great leap.We can do some of that now.This is what I call the new opportunity, with capital letters.It is a new opportunity.You can miss and we can fuck as a country. ”

European countries reached development after wars, giant crises and many deaths.In an excerpt from your new book you write that Chile is closer to development than 1989, but still far from it.In which stage of the path to development is Chile?

“We are with our GDP, as the Central Bank would say, in silver for consumption and investment, in just $ 12,000 per capita.Barely.It is said 25, but they are not.There are 12 thousand that Chile has according to the Central Bank.The bank gives a figure, but I begin to calculate everything that can be distributed.We have to enlarge the cake.We are far.You can take money from some and give part of that to the rest, but it will be an impoverished country. ”

“Then, we can be a country that advances development only if we have growth, and growth is only possible if it is inclusive.Therefore, development should not be based on the great company, because it is half of the workforce.It must be based on the other half, small companies and the workforce that is not working. ”

“If we promote the development of SMEs, we are going to get closer to development: one year, two, three.In ten you will have made a difference.And in two years it is noticed. ”

How much did that State developed?

“You have to convey to people that we do want to do everything in one day, we will miss the opportunity.Germany did it in 20 years, from 1945 to 1965. Korea did it in 30 years of growth.In the middle of the way they passed us, and now he left us 60% behind.They are among the most developed. ”

But that requires a change in population mentality.

“As Pedro Aguirre Cerda would say: educate, educate, educate.You have to educate also in this.The political world has to learn to be able to convey, educate and guide.European peoples understood that they are not in an inflated situation like Chile.I think it will make an inflated economy in demand much more difficult.Therefore, it is more difficult than the challenge of Europeans.Or the challenge of President Roosevelt with his New Deal in the 1930s. Here are people spending more than the country has. ”

Modernize Codelco

Is there a Keynesianist approach in Puerto Alic's politics?

“It is a postkeynesian approach.One is very Keynesian, but we are 90 years later.We learned to handle the economy a lot.And the world is very different, it is ‘financialistic’.It is a danger that leads you to worry about what happens at night.You have to worry about what happens 365 nights of the year and the other year too.That is called ‘Overnight Investment’.Investment at night.Invest at night and the next day pass them to the other side.Those silver moves are moved from workers from one side to the other.You cannot do that, you have to create stable opportunities, with productive development.SMEs that are expanding, that they open, improving their salary payment capacity, which make their productive processes better with a better macroeconomic environment ”.

“Saying all this is complex.How to be able to say it in five minutes and that people can understand it?And that the drivers absorb it.My impression is that at least 3 or 4 people have absorbed it, including the president -elect.But it is ultra difficult to do it, therefore, it is not clear how to do it.Then you have to think about it.There you can help consult people outside who think about this.People who are in productive development ”.

“We also have to take advantage of the directors and former ministers.But you can't wait three months.On March 11 you have to start with many clear ideas.Launch the transformative ideas, not the silver ideas that you do not have.We leave without money. ”

Is it necessary to invest in research centers?

“Yes, you have to give that message.The current government took them money.You have to give them money.0.8% of GDP has been discussed.I agree with that.But not that money is not to publish Papers in Washington.One did it before through foundations, for example.But public plates are for the productive development of SMEs and the State, to innovate public service. ”

And modernize Codelco?

“You have to modernize Codelco.He does well, but he can do it better.And can invest in other areas.It has attributions in lithium: Ejérzalas.He has not done so.There are many ideas, but there are so many things that are absorbed by the question of who will be Minister of Finance. ”

Would you sell a percentage of the company?

"Never.That would be a crime against the country. ”