To streamline processes and reduce barriers to investment: that is the key aim of the Pro-Investment project announced by the Chilean government in a bid to give an important boost to the entry of overseas capital into the South American country.
President Sebastián Piñera and Economy Minister José Ramón Valente have signed the decree creating the Office for Management of Sustainable Projects (GPS) and the Pro-Investment Agenda I bill. In addition, the National Productivity Commission has been asked to carry out a new study to continue reducing bureaucracy in processes, with a particular emphasis on the digitalization of procedures.
“We have declared a true war on bureaucracy,” said President Piñera during the announcement. “We have a portfolio of investment projects that have stagnated or are paralyzed for different reasons (...). No country, let alone a country that aspires to be developed and free of poverty, can afford to keep projects paralyzed for years and years,” he added.
According to the government, there are currently 203 projects, representing an investment of US$65,121 million, that could be implemented over the next four years. Nearly half of these investments are related to mining in which Chile is the world’s largest copper producer and one of the largest lithium exporters.
Projects linked to infrastructure total US$14,150 million, followed by energy (US$10,344 million) and the real estate sector (US$5,505 million).
The plan announced seeks to counteract the contraction of investment seen over the past four years when it fell to 22.1% of Gross Domestic Product in 2017.
Minister Valente explained the benefits the plan will bring. “According to our survey, there are projects for US$65,000 million that could be developed over the next four years and, if they do see the light of day, would create around 250,000 permanent jobs,” he said, adding that this projection of new jobs, if fulfilled, would contribute to the goal of 600,000 established in the government’s program.
In terms of timings, the plan aims to reduce the environmental approval of private projects by six months. According to Economy Ministry estimates, obtaining a permit from environmental regulatory agencies now takes an average of 2.3 years (27 months) and, if the proposed legal changes are approved, this would drop to 21 months. Currently, the average time required to complete all the formalities needed to materialize an investment is between four and five years and, if it goes to the courts, may increase to ten years.
Online platform and provisional patents
The initiative to facilitate investment includes permitting provisional patents, implementing an online municipal platform for procedures, reducing approval times for water-related infrastructure and establishing the environmental evaluation service as a single window as well as updating the register of mining concessions in the country.
According to Juan José Obach, head of the GPS Office, “the idea is to generate all the coordination required with both the developers of an investment and the different public services responsible for granting permits so as to be able to accelerate the process.”
In addition, the decree establishing the GPS Office includes the creation of an Interministerial Committee, comprising 16 ministers and chaired by Minister Valente, to advise the President on the monitoring and control of authorization processes and the approval of investment initiatives.
To learn more about Chile's business environment, see this article.