Statement by Mr. Sha Zukang, Under-Secretary-General for Economic and Social Affairs to the Workshop on the National Voluntary Presentation
Chile, 28 April 2008

Delivered by Mr. Alberto Padova, Deputy Chief, Policy Coordination Branch, Office for ECOSOC Support and Coordination, Department of Economic and Social Affairs

Excellencies,
Distinguished colleagues,
Ladies and Gentlemen,

As head of DESA, the United Nations Department that supports the Economic and Social Council, I congratulate you on your decision to make a national presentation at the 2008 ECOSOC Annual Ministerial Review. I would like to express my sincere regrets for not being able to join you for this important meeting. However, I would like to contribute towards this national workshop, which is meant to serve as part of the preparations towards your National Voluntary Presentation (NVP). NVPs are an integral part of the Annual Ministerial Review of ECOSOC. The Review was set up to serve as a catalyst for driving implementation of the global development agenda. Through the NVPs, the Review hopes to enable countries to connect national-level decision-making processes with consultations at the international and regional levels.

Economically, Chile remains a strong performer. Exemplary macroeconomic management continues to deliver robust public finances and low, albeit recently rising, inflation. Structural reform is ongoing, ranging from improvements in regulation to a strengthening of social protection, including through much-needed further pension reform. Growth is on the rise, contributing to further reducing Chile’s still sizeable income gap relative to the OECD countries, reducing poverty and improving income distribution. Sustaining productivity-driven growth over the long term through continued structural reform initiatives is Chile’s overarching policy challenge.

Chile has become the first country in Latin America to achieve a 50 per cent reduction in extreme poverty, a milestone in implementing the Millennium Development Goals. Chile’s anti-poverty gains are the result of a series of structural and social reforms that led to a consensus among citizens and a wide cross-section of political sectors in favour of increased social spending, with much of it aimed at the poorest of the poor. The reforms were made possible by steady increases in Chile’s per-capita income, which more than doubled between1990 and 2005. In 2007, the growth of the Chilean economy accelerated from the 4 per cent recorded in 2006. This improvement was prompted by strong upward trends in most components of internal demand, led by a significant rise in investment of about 12 per cent from the low levels of 2006. Moreover, Chile deserves recognition for its emerging role as a donor country, as well as a country that facilitates triangular cooperation between other developing countries, especially in the Latin American Region, and developed countries.

We look forward to Chile’s NVP and you sharing with the Council your experiences in accomplishing your development goals – your successes, concerns, and challenges that remain. Despite its many achievements, Chile is still behind in some important areas, such as inequality in the distribution of income, education and wealth; the complete eradication of extreme poverty; gender equity; and full recognition of the value and needs of indigenous peoples. Unfortunately, macroeconomic management was made more difficult in 2007 by risks which arose in the external and internal environments. First, soaring world commodity prices, while favourable for several of the country’s exports, were reflected in increasing costs for a number of goods which affected prices on the domestic market. Furthermore, rising fuel prices and the energy shortage led to increases in regulated prices. This caused unexpected and sharp rises in both short- and long-term inflation indices from April onwards, and the inflation figure for the 12 months to October stood at 6.5 per cent, exceeding the central bank’s target range.

The crisis in the United States mortgage market initially led to higher country-risk premiums for the emerging economies. This has had a limited impact on Chile because the country is well equipped to deal with such fluctuations. The measures taken by the monetary authorities in the United States to deal with the crisis, including interest rate cuts, widened the positive margin between the rate in Chile and the United States rate. This led to faster appreciation of the Chilean peso against the dollar, making it harder for some Chilean products to compete with imports and eroding the competitiveness of some exports. Despite these challenges, the foundations of the Chilean economy remain strong, characterized by good fiscal solvency, careful macroeconomic management and continuing buoyancy in the markets for its principal exports, which are well diversified. Thus, the economy is in a good position to cope with external fluctuations. The main exogenous risk factors are rising oil prices and the danger that an economic slowdown in the United States may spread to other developed economies.

Such issues can be considered during the Review, where pragmatic solutions can be discussed and debated. That would be the hallmark of a truly effective NVP. A successful NVP and Review process is one that ultimately facilitates realization of the developmental objectives and priorities of a country. A successful NVP is one that delivers results. The Review and especially the National Voluntary Presentation is not meant to be a “one time event”. Instead, it should be the first step in a process to assist accelerating the implementation of the United Nations Development Agenda and to promote accountability in fulfilling the related commitments. These presentations are meant to provide opportunities for countries to share their experiences and consider ways to overcome the obstacles together, as well as scale up their efforts to reach national goals.

One of DESA’s objectives for the Review and the NVPs has been to attract a diversity of volunteering countries, to ensure a broad mix of experiences and good examples of best-practices. Having several distinct perspectives will highlight the complexity of the issues and different possible solutions. This year, Chile is the only country from the Latin American region that has volunteered for the AMR. I count upon this workshop to examine the main economic priorities and issues of concerns for the Chilean economy in 2008.

I especially hope this workshop will lay the foundations of a truly effective NVP. The key to the effectiveness of NVPs is the feedback provided by the ECOSOC members, in particular, the “friends of the NVP” selected by the country from the UN membership. Ultimately, the NVPs should provide a platform where national level implementation can connect with the ECOSOC intergovernmental machinery. By engaging with diverse and high level actors in development, countries will be able to discuss their challenges and pragmatic solutions to their development concerns. This will thus provide an opportunity to strengthen linkages between the normative and operational work of the United Nations in the area of development, as called for by the 2005 World Summit.

The success of the NVPs and the AMR will depend not only on thorough preparations, the purpose of today’s workshop, but also on a proper follow-up process. We envisage developing the NVP into a mechanism for monitoring and evaluating implementation and ensuring that challenges faced by countries in achieving the internationally agreed development goals, including the MDGs, are addressed effectively.

DESA stands ready to support efforts to strengthen national analytical capacity to monitor and evaluate progress and disseminate findings through the NVP, including through our new website/database. While countries volunteering for NVPs should be the primary beneficiaries of their participation in the exercise, the lessons learned during the process should also be made available to a broader audience. Such a sharing of ideas can lead to more partnerships, successful initiatives that can be scaled up and, ultimately, a more robust global partnership for development.

Ladies and gentlemen,

I wish you a truly stimulating dialogue and engagement of all stakeholders in your development process. And, I promise you UNDESA’s unwavering support in your endeavor.

Thank you.