THE BROOKINGS INSTITUTION FALK AUDITORIUM A BATKIN INTERNATIONAL LEADERS FORUM WITH PRESIDENT OF CHILE MICHELLE BACHELET. Washington, D.C.

Transcription

1 1 PARTICIPANTS: Introduction: THE BROOKINGS INSTITUTION FALK AUDITORIUM A BATKIN INTERNATIONAL LEADERS FORUM WITH PRESIDENT OF CHILE MICHELLE BACHELET Washington, D.C. Monday, June 30, 2014 TED PICCONE Acting Vice President and Director, Foreign Policy The Brookings Institution Keynote Address: Moderator: H.E. MICHELLE BACHELET President of Chile HAROLD TRINKUNAS Senior Fellow and Director, Latin American Initiative The Brookings Institution * * * * *

2 2 P R O C E E D I N G S MR. PICCONE: Good afternoon everyone and welcome to Brookings. Buenas tardes a todos y bienvenidos a Brookings. My name is Ted Piccone; I'm the Acting Vice President and Director of the Foreign Policy Program here. And on behalf of John Thornton who's with us here today, Co-Chair of the Brookings Institution's Board of Trustees, and our President, Strobe Talbott, I'm delighted to welcome all of you here to Brookings this afternoon for a special address by Michelle Bachelet, President of the Republic of Chile. We're very honored that she was able to take time out of her busy schedule here in Washington including her meeting with President Obama at the White House earlier today for the Foreign Policy Program's Alan and Jane Batkin International Leaders Forum. I also want to extend a warm welcome to President Bachelet's high level delegation from Santiago, including many Ministers, members of Chile's Congress, and private sector leaders. We're especially happy to welcome back to Brookings Foreign Minister Heraldo Munoz, who back in 1977 spent a year with us here at Brookings as a Visiting Fellow finishing up his Ph.D. President Bachelet is no stranger to our halls either. She joined us in 2009 for a talk from this podium on how Latin America was coping with the global financial crisis. And Washington is familiar ground as well, from her early days as a junior high school student in Bethesda and her studies at the Inter-American Defense College, to her many visits as Chile's Minister of Defense, Minister of Health, and President from 2006 to President Bachelet joins us today as she enters here second tour as President of the Republic after winning over 62 percent of the vote in Chile's national elections last December. With a majority of seats in Congress held by her Nueva Mayoria Coalition President Bachelet has moved quickly to enact an ambitious

3 3 agenda of reforms, most notably in the areas of education, taxes, and constitutional and electoral design. This agenda reflects Chile's remarkable success as a leader in both economic and political terms and its determination to continue moving forward on the path of social and democratic progress. President Bachelet also enters office at an important moment for Latin America which in addition to dominating the World Cup competition so far is facing its own challenges as it pursues more equitable development, greater integration, sustainable energy, and democratic stability. I can think of no other leader in modern Latin America more prepared to take on these challenges than President Bachelet whose remarkable career as a medical doctor, an imprisoned and exiled political activist, a global leader in the fight for gender equality and empowerment as the head of U.N. Women, and now a two-term President, makes us all proud of the promise of democracy to deliver real results. President, we look forward to your remarks. We will then have time for a discussion moderated by Harold Trinkunas, the Director of our Latin America Initiative, and including some questions from the audience. If you are following us on Twitter, please use #Bachelet. Welcome, President Bachelet. (Applause) PRESIDENT BACHELET: Thank you, Ted, for those kind remarks and particularly thank you for being there with us watching the football game too, suffering as we suffered. Thank you very much for that. (Laughter) I want to -- Chairman of the Board of Brookings Institution, Mr. John Thornton, Acting Vice President and Director of Foreign Policy of the Brooking Institution, Mr. Ted Piccone, Director of Latin America Initiative of the Brookings Institution, Mr. Harold Trinkunas, Secretary General of the OS, His Excellency Jose Miguel Insulza, Ministers, Senators, and Congressmen and members of the Chilean delegation, distinguished ambassadors and representatives of the Diplomatic Corps, officers and representatives of the U.S. government, professors

4 4 and members of the academia, ladies and gentlemen, and dear friends because I see a lot of good friends here, I started this to give a little of Latin American touch. We usually start off speeches with a long mention of the all of the important people. So, dear friends, it's always a pleasure to return to the United States which as my home for several years, a home where I learned important lessons and made close friendships. I thank Brookings and the Institutions that have co-sponsored this meeting, and returning to Washington as President of the Republic of Chile optimistic that we have initiated positive changes for the future of the country I'm confident that this is a worthwhile task. In recent decade Chile has embarked on a successful path of democratic changes. We have significantly reduced poverty and have also strengthened the country's stability, economic, political, and social. We are internationally recognized as a country with good practices, clear rules, and working, and I would say sound, institutions. This has given us a solid anchor in the fluctuations of the globalized world. In other words ours is a steadfast stability, ours is a steady growth. And the basis for this has been the stability of our domestic, social, political, and economic relations. Above all our governance is based on identifying and addressing those issues which will lead to a more equal society and dynamic development. Today the challenge facing Chile is the elimination of inequality. Dealing with this will enable us to achieve inclusive and sustainable development and to be counted among the most modern developed democracy. And we take up this challenge not only because it is the right thing to do but also because it is the most intelligent and reliable way of banking on our future with economic dynamism, political stability, and social cohesion. This challenge requires us to deal with three central aspects, tackling inequality understood as disparity of opportunity, lack of access or discrimination, and injustice among citizens. Second, encouraging harmonious, sustainable, and inclusive

5 5 growth. And third, achieving greater civic participation in decisions affecting all Chileans. In other words, we're not talking about rewriting but rather about consolidating our history of development and democracy, making improvements and changes where shortcomings still exist. And it's not only my idea or that of the people who voted for me, it is a national consensus built up over years. Although there are legitimate differences regarding the best ways of achieving the transformations -- and this is what we have launched, a broad national debate -- nobody in Chile denies the need for change because as in most nations of the planet society itself has changed a great deal in recent years. Citizens have become more active, more critical, better informed, and more demanding; if I would say also more challenging. Many voices in a multitude of languages are calling for societies not to forget in their institutional dealings, in their economic management, and in the design of their public policies what should be the focus of any social contract, the people. Although from the government's viewpoint this demand represents a challenge, it is an interesting and important one. The challenge of ensuring that people are more involved in decision-making on matters that affect them so that development policies are translated into quality of life, social cohesion, and democracy. For us this means reappraising collective life and public interest, promoting dialogue with a civic sense, and a respect for differences. The challenge of eliminating inequalities has an ethical component since it refers to a good life for all. But it also has an economic component. That's why we're saying it's the right thing to do but it's also the smart thing to do because we know that we need dynamic and sustained economic growth in order to tackle inequality, eradicate poverty, create opportunities for development, and generate revenue for the implementation of social welfare policies. And so it is both senses that Chile has decided to assume and expand the undeniable progress made by the country since the return of democracy, recognizing today's new challenges and focusing on governance

6 6 through growth and stability of democracy. Around 2020 Chile will have achieved per capita income similar to that of the developed economies. But we shall not be a truly developed country if we continue to be one of the OECD countries with the highest income inequality. And this inequality affects our social cohesion and our prospect for economic development. This is why we must tackle it decisively and at the same time opt for inclusion and growth. Like most Chileans I'm convinced that the biggest risk to the stability and progress of Chile is not making the changes that we need to make. Because inequality undermines one of the most important foundations, both of the economy and of democracy, trust. Trust in the market, trust in institution and stability, trust in social relations. And trust is a precious asset which today Chile has to decide to enhance, reducing inequality and fostering cooperation between the State, the citizenry and the market. And this is the underlying meaning of the reforms. And we are optimistic because this is the best way of building a better country for all. We have a strong foundation on which to build. In recent years Chile's economic growth has been positive and unemployment had declined. This allowed important progress to be made in the expansion of social rights and opportunities for people. This reflects the global financial scenario, good copper prices in recent years, and our monetary and fiscal response to the financial crisis. These conditions are cyclical and difficult to replicate. When the factors underlying the dynamism of our economy disappear growth prospects will recede. Chile is currently experiencing a period of low growth below its GDP potential and we must respond to the challenge which this represents. Chile's growth for 2014 is estimated at just over three percent. Starting in 2015 our goal is to resume the steady path of growth and in the second half of our administration for Chile's growth to be about five percent, at its potential GDP level. We have set ourselves ambitious goals but we are taking a realistic

7 7 approach to these economic conditions facing us. We need to generate more economic growth but not growth of any kind. We need growth that is socially legitimate and inclusive, environmentally sustainable, and democratically oriented. For these we need to broaden the basis of our development by means of structural reforms. Chilean society, the citizens, and our economy indicate that now is the time to undertake such reforms. What are the changes that we are proposing and that are already on their way? One, structural reform of education, focusing on quality public education and inclusion. Two, simulation of economic growth and productivity, innovation and competitiveness. And this obviously involves also tackling the challenges facing us regarding energy. Three, tax reform providing ongoing resources for the State and redistributing more equitably (inaudible) of common development. It must also lead us back to the path of fiscal responsibility which is essential if the State is to honor its commitments in the medium and long term. Four, a new constitution, an up-to-date one allowing more scope for democracy, participation, and guarantees for people in all their diversity. I should like to refer briefly to all these topics. Firstly, education which fosters equity, productivity, and democracy. I'm not going to say anything that I will win a Nobel Prize here, but knowledge is essential in order to achieve ongoing prosperity in all these areas. And to generate this knowledge countries must make education the focus of their development strategy. This is what countries have done. Those countries who have achieved development such as Finland or Japan, Singapore, or the United Kingdom. Chile needs some -- loudly demands far reaching change to improve the quality, scope, and coverage of education on all levels. You will undoubtedly recall hearing the news three years ago that thousands of students in Santiago issued a structural demand, their right to free and quality education. That was a time with a lot of young people were in the street all over the world, but something that I was here working

8 8 for the U.N. and everybody will ask me in any meeting, how could you explain this because we understand it in countries who are doing bad in the economy but you're doing well in the economy. How do you explain that doing well in the economy and still people are demonstrating massively in the street? I have to tell that the demand that those students were posing was echoed throughout the society, anxious to ensure that all children and young people are given not only basic education, but also appropriate standards of quality over and above what a family can pay. And Chile has -- and I have to tell you when a country so -- I would say proud of what we have been able to build, coming from a dictatorship to build a sustainable, mature democracy with good economic performance, well people believe now it's our time. We really deserve to have quality education for all. Chile has an important task here. Today we are the OECD country ranked as being most dependent on private funding for its high education, exactly 85.4 percent. In Korea, Japan, and the United Kingdom their reliance on family contributions is considerable but much less than in Chile. More stake investment in education is therefore crucial for a society aiming at equitable and sustainable development. I know this is also a discussion here in the United States about education and the debt that the students are having right now. Chile must remedy the shortcomings of the existing system and provide guarantees of the principles underlying our right to education. That is integration, universality, and quality. So this is why we have initiated the structure reform which his already under way. And the proposals concern various aspects, improving of public education, an end to discriminatory selection of students, an end to profit making by establishing receiving public funds, and an end to copayment that parents and institution with mixed financing. In other words we want families not to have to pay for their children's education in establishment receiving state funding. Second, creation of two new state universities. They will be created in two regions of the country

9 9 where there is no public university. And third, institution building and improved coverage of preschool education. In addition we are guaranteeing access to college to for the most vulnerable students through a special program of access to higher education. And we're improving technical education throughout Chile under the auspices of regional universities and with education products reflecting the economic and productive characteristic of each territory. What is our goal? Our goal is to guarantee that all students in Chile without exception can obtain quality education free of charge. What we really want is not to lose any of those talents, capacities, that our people have and that are not distributed according to the income of the family. So we need everyone to have the opportunity of a good education and then to contribute to the country's development. Private providers of education may continue to participate if they meet quality standards, manner of forms of discrimination, and assume the responsibility of the obligations incumbent of a public service. Of course the State must play the leading role in both the delivery and regulation of education. This will produce better informed citizens, promote social mobility, equity and inclusion, and allow Chile's growth to depend not only on its natural resources but also on the knowledge of its people. And this brings me to another focus of my government, development of production and competitiveness. We know that productivity increases slowly in Chile. And we also know that innovation is the main trigger of long term growth. We must therefore add more knowledge, more complexity, and more innovation to our economy, and also involve those who are not participating today or are participating below their potential. We must also diversify our production matrix. In addition to the exportation of our natural resources and particularly copper, other production sectors must contribute relatively more to the generation of wealth and economic growth. In order for this to

10 10 happen man power training is essential. Accordingly we have set in motion initiatives to expand the coverage, the contribution to activity, and the relevance of training for work. Through specialized and targeted plans we are making a special efforts to generate suitable incentives to increase the participation of women and young people in the world of work. In Chile these two groups have the lowest rates of participation in the labor market, 54.6 percent for women and 37.1 percent for young people. These figures are respectively 7.7 and 10.3 percentage points below the OECD average. In addition to investment in human capital we shall increase investment in science, technology, and innovation, offer incentives for the application to the solution of the country's problem. We must implement a strategy that takes into account the conditions, strength, and needs of our country, a strategy based on research and innovation in which public-private initiative is essential. In this context we have announced two powerful programs that go to the heart of the economic activity, the agenda for productivity, innovation, and growth, and the agenda for energy. The agenda for productivity, innovation, and growth focuses the development strategy for diversification of the production matrix, inclusion of more people in the labor market, incorporation of new economic sectors in our basket of exports, stimulus of our strategic area, support for small and medium sized enterprises, and creation of quality public infrastructure. This extensive agenda includes a series of measures to which the experience of the United States will be very useful to us. For example this agenda envisages a national network of business development centers which will provide comprehensive advice to help small and medium enterprises to improve their business models. And I know that you have small business development centers which are our inspiration I have to say. Then you can ask the copyright but now we have (laughter) -- we're going to copy it. We just signed an MOU with the government so don't worry.

11 11 (Laughter) Which as I said your small business development center is our inspiration and we are already cooperating in connection with this project. Well, I'm not going to describe the whole agenda; it's pretty big, it's lengthy, and available to the public. But I do want to add that we shall also have a system of cluster to support the productive diversification of our economy and expansion and strengthening of the sectors already consolidated. Through those actions we shall finance public goods to buttress significant investment projects with a focus on sectors with high potential for growth and job creation. However while setting new productivity targets we're also aware that Chile faces considerable energy challenges. Chile imports 60 percent of its primary energy. This means that our country is sensitive to price instability and volatility in international markets to supply restrictions. We must invest in infrastructure in new generation and transmission projects in order to reduce this dependency. It has not been happening in recent years and this means that we have not incorporated basic energy that we can use to guarantee a reliable supply in the short and medium term. We are aware of the urgent need to encourage projects to reduce the energy deficit and we have said that we shall strongly support all initiatives that comply with the rules in force and are a good fit in our regions. In this area to the State and the private sector must work together. And this is a key point because one of the obstacles to the sectors' growth is the lack of social permits for those projects. There are two important challenges here, to strengthen the energy institutional structures and to work to reconcile the interest of local communities with those of the energy general and transmission projects. This means work at an early stage, following clear rules to ensure the development of this project is feasible in the medium and long term. We are therefore working on a plan of territorial development allowing us to decide which projects can be located and where. We want to see all stakeholders in together to define sort of

12 12 an area of development so we can get into some agreements on this. However we also face the challenge of improving competition in the energy market and encouraging new players to enter the market. From this we hope to be able to study the experience of the United States from which we have much to learn about gas distribution, renewable, non conventional energies, energy efficiency, and good practices. And I want to stress this, it is urgent for Chile to ensure reliable and efficient energy development at competitive prices, but at the same time to use our renewable resources in a sustainable and non polluting manner. This is the meaning of our energy agenda, ensuring that the country will have a diversified balance and sustainable energy matrix. We aim to reduce energy prices, ensuring greater competition, efficiency, and diversification in the energy market. We shall ensure that 45 percent of the electricity generation capacity that we install between 2014 and 2025 comes from renewal non conventional energy resources so that is accounts for 20 percent of Chile's energy matrix within a decade. In addition we have proposed energy efficiency should be a state policy, the rule rather than the exception. Our goal is for us to be able to reduce or consumption by 20 percent by We're talking of a total of 20,000 gigawatts per year. And I know that here too you have much to teach us since the Energy Policy Act of 2005 attaches great importance to efficiency. Ultimately the goal of this agenda is to give certainty to all relevant players, to increase predictability, to reassure communities, and to introduce clarity into the rules for investors. Dear friends, I know that this is an extensive program of change. However the point is that Chileans want to implement it while preserving the growth and democracy governments that we have built with considerable effort. Consequently our fiscal policy will continue to be guided by the policy of structural balance because the commitment of new ongoing expenditure must always be linked to ongoing revenue.

13 13 This is the first responsibility of state towards people. For this reason in the view of the need to undertake a structural reform of education and other social welfare requirements we shall be implementing a tax reform that will give the State the necessary revenue on a sustainable basis equivalent to three percent of GDP. In addition to providing ongoing revenue the goal of the reform is also to improve income distribution and tax equity. In Chile we have a sad paradox. The gap between the income of the richest and the poorest household is not reduced after payment of taxes. And this is a problem that we must solve as a country. And of this reform currently going through Congress, those with the highest income must make a greater effort to contribute to public revenue. And this is a well structured reform with well designed incentives to be introduced gradually. Some have tried to describe this reform as antigrowth. I should like to say that when the developed countries had a per capita income similar to that of Chile today most of them had tax burdens considerably higher than Chile and tax systems that helped to redistribute income. Those countries developed as they collected higher taxes and provided their citizens with a much higher standard of living. Chile has room for improvement as regards taxation. In 2010 Chile's tax burden was 18.4 percent and the average was 20.6 percent for OECD countries which at that time had a per capital GDP similar to that of Chile. There is no reason why Chile cannot follow the same path. The tax reform that I have described may not please everyone, it doesn't please anyone I have to say. You don't have to but I know. (Laughter) But it's essential if we are to tackle the inequalities and continue to develop. It should be noted that the expected effect of the higher taxation on public saving and training of human capital will be more than offset the short term effects on investment. Moreover the income tax increase will have little or no effect on investment. Chile is an active player in international financial markets with a low level of risk. Thanks to our macroeconomic policies and fiscal

14 14 soundness we have a low risk classification at the global level and are the economy with the lowest risk in Latin America. We have no reason to fear that a tax reform earmarked for investment in human capital will alter our economic development course. Taxation is only one of the factors affecting investment and it's far from being the most important one. Status on subject conclude that the most important factors for investment are fist, social cohesion and political stability; second, equality and credibility of public institutions; third, the accessibility and competitiveness of markets including financial markets; four, is restructure; and five, appropriate economic legislation. And in all these areas we are meeting our challenges. I shall not describe in detail all the tax reforms but I do wish to say that they have four goals. The first is to increase the tax burden in order to finance ongoing expenditure with ongoing revenue. The educational reform in which we are engaged and other social welfare policies and reduction in the structure deficit in fiscal accounts. Second to improve income distribution and tax equity. Third to introduce new and more efficient way of encouraging saving and investment. And fourth to implement measures to decrease tax evasion and loopholes. I know that one aspect of this tax reform will be of interest to you. The repeal of Law 600 concerning the foreign investment statue. New investment projects and a tax invariability clause. This legislation was adopted in 1974 in a very different political, social, and economic context, when there was a dictatorship in Chile and our international prestige was at a very low level. The lack of democracy, lack of freedom, and reliability of our institutions meant that mechanisms such as this were needed in order to encourage foreigners to invest. After 25 years of democracy with our solid international prestige, in a context of good governance, democracy, and freedom, we no longer need this mechanism to make foreign investors look favorably on the idea of investing in our country. The institutional stability of our country enables us to take the

15 15 decision to continue this mechanism without affecting foreign investment in Chile. I should like to share some picture -- sorry, figures with you. Would have been if I brought some pictures but I didn't bring some pictures. (Laughter) Chile has trade agreements with 61 countries. These countries account for 63 percent of the world's population and 85 percent of global GDP. In addition Chile ranks 34th out of 144 economies in the World Bank's Doing Business Index. As regards to Chile as a place for doing business I should like to say that in 2013 our country was among the first 20 economies receiving foreign direct investment; it ranked 18th according to the United Nations Conference on Trade and Development. And foreign policy has also -- I don't know if it's changed but we are also trying to do -- I mean to have new emphasis, new focuses, and we are looking at Latin America and the Caribbean as a very important option. Latin America is our natural space and from there we shall reach out to the world. We realize that it is a diverse region but we must respect the different path to development. Differences are not obstacles for convergences. We believe that Chile can help to build bridges of understanding over and above differences of approach and that as I have noted on so many occasions, the region present the most united face possible to the word. This position precisely explains our conception of the Pacific Alliance, an economic integration project that does not preclude or oppose other integration schemes. A few days ago in Mexico I reaffirmed our commitment to the Pacific Alliance. Similarly we have promoted convergence and dialect between the Pacific Alliance and the Mercosur Countries without watering down the Alliance's specificity or its rates of progress. We shall pay special attention to Latin America and we shall continue to develop our excellent political, economic, and cultural relations with our partners in Europe, Asia Pacific, and particularly North America. Our relation with the United States

16 16 are characterized by their solidity, trust, and maturity, reflecting important shared principles, values, and interests. We believe in the strength and relevance of democracy and the rule of law. And we defend the rights of individuals and their fundamental freedoms. In addition we share a common ambition of the importance of free trade in issuing, developing, and stimulating investment, and we're working together to create a multilateral trade system based on clear, predictable, and transparent rules. Chile and the United States must move forward in our relationship. And I'm sure that after this visit new dimensions and areas of understanding will emerge for a new association focused on scientific and technical cooperation, innovation, energy, and education among other things. Dear friends, at the outset of this speech I spoke of the importance of trust in ensuring a country's development. This trust also depends on the continuous enhancement and expansion of democratic rights of the citizens. This is why I have advocated a new constitution. Our existing constitution dates from 1980 and was adopted in conditions which today nobody could describe as democratic. Despite the numerous and various amendments introduced over the past decade it still has this sort of deficit origin if I may use this term. In addition it contains provisions limiting electoral majorities, allowing minorities to tie with majorities. And this is contrary to the one with the basic tenant of any modern state, respect for the voice of the majority and not allowing a few to veto what a nation wants. In addition this forced tie makes it difficult for the country to democratically resolve its differences. A fully democratic social covenant is an essential prerequisite for trust in the institution, trust in the State, and trust in politics. And it is essential to a healthy society in which entrepreneurship flourishes and private initiative has certainty and stability for its action. While we have been laying the foundation for a new constitution which is

17 17 necessarily a lengthy process of dialogue and participation we have not remained idle. After more than 20 years of discussion Chile has abolished a major exclusion. Starting with the next Presidential election Chileans living abroad will be able to vote. In addition we have drafted legislation reforming our binominal electoral system which in practice allows a tie between majorities and minorities in terms of legislative representation, replacing it with a proportional system providing for higher levels of competition and representativeness, especially for smaller parties. And I shall add trying also to introduce more gender balance in our Parliament. We are very far away from that. We are adopting this course because we are convinced that enhancement of democracy is the key to a more solid society, a society anchored in respect for individuality and difference but which can guarantee in each person appropriate standards of respect and well being. And also a society which has legitimate institutional mechanisms for resolving its differences. It is in this space of respect and trust that collective (inaudible) can evolve, linking individual expectations and initiatives with the great dreams of society. The transformations that I have described here will require time and gradual introduction so they can mature with dialogue and democratic participation and can be anchored durably and legitimately in our society and institutions, so that they can enjoy the support of a sound economy and legitimate institutions. Many of them will last beyond a government term of office because we are thinking about development in the long terms. Chile's not a populist country. We know that economic responsibility and democratic legitimacy are the only way to create lasting and equitable well being for each of its citizens. Dear friends, at the solstice which occurred last week the Indigenous cultures of Chile celebrate the New Year as in the case of many places. It is the beginning of a new cycle of collective work, organization and commitment looking forward

18 18 to a good harvest. And this is the task on which in this new cycle we have embarked as a society. And like the seasons it represents no disruption but the wisdom to recognize the tasks that are fitting for each time. Thus we shall sow a seed of social capital, cohesion, and well being with deep roots which is the basis of all solid and sustainable development. I know that the great task on which Chile has embarked in my term of office will last for several calendars, but it will be a harbinger of spring in all its splendor. And this is the reason for our optimism and of course our untiring work. Thank you very much. (Applause) MR. TRINKUNAS: President Bachelet, thank you for joining us here at Brookings. It's wonderful to have you here with us. We have a few minutes now for an opportunity for some discussion and I'd like to take the moderator's privilege to lead off with asking the first question. I'd like to turn back to some of the foreign policy questions you raised in your speech. As you know Chile is currently once again serving on the U.N. Security Council and it is a time of rising global insecurity, tensions in Europe and Asia and the Middle East. I'm wondering if you could talk to us a little bit about how you envisioned Chile's role playing out in the Security Council during this term? PRESIDENT BACHELET: Well, we see ourselves as always we have seen ourselves, as a country who has the respect for the rule of law and respect multilateral institutions and respect a peaceful way of solving problems when it's possible. Of course it's not usually the kind of things that Security Council has to deal with. But we will be ensuring that the principles and values that Chile was represent and that we share with the United States will be the ones who every time we have to discuss case to case will be put there as the more important issues. But we also I think -- and we were talking with President Obama about that -- I think we need to discuss much me on the way we're

19 19 dealing with conflicts, the way what -- which is the role and the -- I mean -- and if peacekeeping operation needs more support and needs to see what else we have to do. I mean my opinion not only as President of the Republic but having worked in the U.N. and having -- I mean as Minister of defense we send -- I really push a lot on Chile's I would say very active participation on peacekeeping operation, but after being in many countries, visiting many refugee camps, visiting peacekeeping operation sides, I think we need to make a stronger thought and assessment and see what else we can do because I'm not sure we're winning the battle and we need to do much more about that. MR. TRINKUNAS: Thank you, President Bachelet. I think we have time to take a few questions from the audience. If you could please wait for the microphone. Raise your hand if you wish to ask a question, and if you would identify yourself and your institutional affiliation. While we wait for the crowd to collect its thoughts (laugher) I wonder if you could talk just a little bit more about your government's thoughts on the Trans-pacific Partnership. I know there's been -- some doubts have been raised about the direction of the negotiations and I'm wondering if you could elaborate on what direction do you see Chile taking in the negotiations as they go forward. PRESIDENT BACHELET: As you may know this all started with the P4 when Chile was part of it. And then we -- as with Singapore, Grenada, Salaam, and New Zealand, and looking at the way -- because in APEC all the economies -- it has been very difficult to think on the free trade agreement of the whole Asia Pacific area and we do believe that is a good idea, we have been pushing towards that. So when we were in the P4 we start inviting many other nations to be part of it. So that's why it came to a P7 and P8 and now it will be -- it will use the former name, it will be like a P12. So Chile has been part of this very strongly. The thing is that when we are talking about the TPP we

20 20 need to see the result has to be better than what we have today because we have already free trade agreements with all the rest of the 11 countries. So what we are negotiating if I may say or analyzing, what it would mean, in which terms, and how we can ensure -- I mean we really want a free trade agreement with the highest standard of quality level standards but we need to ensure that those standards are also respecting the national interests. So that's the kind of thing -- I'm not going to go into the technicalities. There are some issues we need to discuss further and we are in that doing so. So we hope we can be able to get a good solution, for a sort of a win-win solution for everyone because we believe that this really could be a very important perspective on trade and economic relations between the 12 countries. MR. TRINKUNAS: Yes, Richard. MR. FEINBERG: Richard Feinberg, Brookings and the University of California, San Diego. Madam President, thank you for your very inspiring and persuasive remarks. You spoke of Chile as a potential bridge among counties. In the western hemisphere right now perhaps two of the most difficult problems are the polarization in Venezuela and the issue of change in Cuba. I wondered if you could specifically indicate what role Chile might play as a bridge in those two ongoing problems? PRESIDENT BACHELET: Well, I would say as a matter of fact we not only envision we have been doing things about that. In the case of Venezuela what we have done and during my inauguration days the Minister of Foreign Affairs had a meeting with the rest of the Ministers of Foreign Affairs of UNASUR and we believe that public statements are good but are not sufficient. So instead of having a big public statement we thought it would be better to put people in action. So we decided to send a mission of Foreign Ministers to Venezuela. And it was I would say at the beginning pretty

21 21 successful because it permitted for the first time government and opposition get together, sit together and talk, and dialogue. And there has been other visit with different -- and some progress made. And the last time I believe probably it's a little bit slow, but the only thing that I believe is we know it's not easy, it's a very polarized society as you mentioned. But we have had in the past when I was president of UNASUR for temporary because every year is a new president of UNASUR, we had a situation in Bolivia and I personally handle it and we could avoid to get into a worse possibility. So we truly believe that through dialogue that probably we need to make bigger efforts so we can see a solution. That I have to say is the Venezuelans who have to solve their internal issues. And what we need to do is to support them with the Vatican, The Vatican is also part of this process -- to support all the process of dialogue and hopefully a peaceful solution to the internal conflict. We are also very active in the case of Columbia and the relationship with the FARC and now with the ALN, that their government started the negotiations to. We have been very helpful in that too and President Santos has recognized us and we'll be continuing looking forward to support all the efforts that President Santos is doing to bring peace into Columbia. And in the case of Cuba, of course we will always be able to building bridges. We haven't had yet any visit to Cuba or something like that but we are looking forward if we can do any process in supporting whatever is needed, we will do that. MR. TRINKUNAS: Thank you. We'd like to take a question from our overflow room. This turned out to be a very popular event and we want to give them a chance to ask questions as well. We have a question here regarding the Indigenous communities of Chile and what policies in your government do you foresee in terms of their role in Chile and the question of land I understand is one of the issues that is at

22 22 hand. PRESIDENT BACHELET: Yes, he was asking about the Indigenous (laughter) communities in Chile (applause). But the important thing is that I heard the question so I can answer it. This is it. The thing is that we have said that we need to -- let me see -- sort of a new pact with the Indigenous communities because we do have historic political depth if I may say with them. So we have a whole agenda of different things from ensuring political participation of the Indigenous group but also economic development, all the land and so on, cultural measure, et cetera, et cetera, so they can really be integrated but within their own specificities, diversity of their own culture. Chile can be a multicultural country and we have many different Indigenous groups, it's not only one. We have from the north, Aymara, to the Kawashkar and Yamanas in the south, and of course Rapa Nui and Mapuches, and the Yaghitas and Collas, and Quechuas, et cetera. And so it's very important that we have a whole agenda that has been worked with them too, but also what we have been doing and it's very important I believe, and we were talking about social permits, it's also linked to that, is that we have approved -- as a country we have ratified the Convention 169 of ILO and in that convention states that all kinds of projects, administrative, political, or economic projects, that affect directly the communities should go to consultation with the communities. So for example I have in my program a Ministry of Indigenous Affairs, an agenda, a council of Indigenous people, I have the Ministry of Culture, and so on. But I didn't send those projects to the Parliament until we do the right process of consultation. And that should be -- in many other situations they should be part of at least in a consulting way to be part of giving their opinion on what and how do they feel and what would like in some issues or institutions that were represented. So I would say it's a new way of doing things on one hand, but also in a very active agenda dealing with the -- I would say shortcomings that we have

23 23 had with them and some challenges that we have had. And I know that we will be able to in that sense also to diminish some conflicts that we have in some part of the country. And also with a lot of social protection because in many of the Indigenous areas are the places we have higher rates of poverty or higher rates of some diseases and that it's linked with poverty. So we need to I would say pay more attention with them but with respect to their own values and culture. MR. TRINKUNAS: Thank you very much, President Bachelet. I'm afraid that we've come to the end of our time. Thank you for being so generous and sharing with us. PRESIDENT BACHELET: I'm so sorry, I spoke too much. (Laughter) MR. TRINKUNAS: Thank you. Please join me in thanking President Bachelet. But I would also like to ask the audience if you could please remain seated until President Bachelet and the members of her delegation that are accompanying her to her next meeting have a chance to clear the building so that we can try to keep you on schedule. PRESIDENT BACHELET: Thank you. MR. TRINKUNAS: Thank you very much. (Applause) * * * * *

24 24 CERTIFICATE OF NOTARY PUBLIC I, Carleton J. Anderson, III do hereby certify that the forgoing electronic file when originally transmitted was reduced to text at my direction; that said transcript is a true record of the proceedings therein referenced; that I am neither counsel for, related to, nor employed by any of the parties to the action in which these proceedings were taken; and, furthermore, that I am neither a relative or employee of any attorney or counsel employed by the parties hereto, nor financially or otherwise interested in the outcome of this action. Carleton J. Anderson, III )Signature and Seal on File) Notary Public in and for the Commonwealth of Virginia Commission No Expires: November 30, 2016