“Chile is falling behind”: the four factors that slow down productivity, according to the CNEP

The National Evaluation and Productivity Commission (CNEP) presented his diagnosis about the four factors that explain why productivity is stagnant in the country: human capital, technology and innovation, infrastructure, and institutional quality and economic environment.

At the business meeting of the O’Higgins region ENEO 2024, the executive secretary of the entity, Rodrigo Krell, warned that ““Chile is falling behind.”

According to his presentation, regarding human capital formation The problem is the quality of education. According to the 2015 PISA test, 49% of high school students do not reach minimum competencies in mathematics and 35% are equally deficient in science. While more than 60% of adults can barely perform simple tasks such as counting, identifying graphic representations, and calculating change.

In innovationpointed out that the country’s spending on research and development is 0.36% of GDP, “and what is even worse, this 0.36% includes the State’s spending on R&D.” While in construction and quality infrastructure it has been shown that investment in this area stopped growing in 2012a stagnation related – he said – to the growing regulatory complexity and the slow process of obtaining environmental and sectoral permits necessary to start projects.

Finally, in institutionality The economist indicated that Chile has also dropped in the World Bank’s global indicators to determine the quality of governance. “Chile shows a marked downward trend, with the quality of our political institutions being the factor that has deteriorated most strongly.. This has made it more difficult to generate good public policies, in line with the challenges that are significantly more complex than 30 years ago,” he emphasized.

While Krell explained that there is no silver bullet to reverse the current situation, he said there is still room for improvement.

“We are at a stage where probably hundreds of small, well-calibrated reforms are needed, none of which move the needle By itself. But they, together, are capable of generating a significant leap in productivity.”, he warned.

The director indicated that the CNEP has made more than 500 public policy recommendations, of which the majority have not been taken into account, while there are reforms that have not advanced due to political obstacles.

However, he highlighted that, for example, in line with the entity’s recommendations regarding investment permits, significant consensus has been achieved with a bill in Congress, and the Ministry of Health implemented a pilot plan that allowed daily surgical care to increase by 58% and that today is spreading to all hospital networks in Chile.

“Implementing these types of ‘microeconomic’ measures throughout our country and across the different economic sectors makes a difference in people’s quality of life. And that is what productivity allows: better quality of life“, he pointed.