MercoPress. South Atlantic News Agency

Magallanes asks for extension of pro-business bills

Magallanes Region in the extreme south of Chile requested from the central government a 20 year extension of the legislation which contemplates certain benefits for business and investment in the remote areas of the country.

In a meeting in Punta Arenas between Chilean cabinet chief Jose Antonio Viera-Gallo, representatives from the regional Production and Commerce Confederation argued that Magallanes still needs special promotion to ensure a sustained development particularly since the region has a record of low growth rates compared to the rest of Chile, a demographic expansion below the national average, it faces isolation and lack of connectivity problems plus the typical shortcomings of an administrative system highly centralized as is Chile's. The confederation's interim president Ricardo Salles said that Mr Viera-Gallo statements about Magallanes had been off the mark and unfortunately "he was misinformed". Although Magallanes has the lowest unemployment rate in Chile, and has had for several years, this is a consequence of the exception legislation. This however overshadows the fact that labor in the region "lacks improved technical education" and has a very low average income. Opposition Senator Carlo Bianchi in an interview with La Prensa Austral said he felt disappointed because Viera-Gallo was only 48 hours in the region and "preached as if he had spent all his life in Magallanes". He underlined that official statistics show that in Magallanes "40% of the population has an income below 400 US dollars per month and the cost of living in the region is 25% higher than in the rest of Chile". However Salles was more diplomatic and suggested that the Argentine provinces model could be a course of action. "In the Argentine southern provinces business and investors have a 23 year horizon of special promotion laws and incentives which sends a clear long term message of stability, both for locals and international businessmen", pointed out Salles. The debate is crucial for Magallanes since the Chilean Congress following on an Executive initiative is planning to extend the special promotion laws for another two years and then eliminate the program. Other areaa of contention are some coal prospecting and production programs in the island of Riesco and exploring for hydrocarbons in Magallanes Region. Salles said that the region is concerned about the impact these projects could have for the leading industries of the region, cattle breeding and tourism. He alleged the local residents have not had access to the environment impact assessment reports. The Production and Commerce Confederation also expressed concern about the decision from Santiago to build ferries to link different areas in the region and which supposedly would be managed by the government. "This means ignoring the private sector and apparently contradicts national policy", added Salles. Finally Mr Salles said the local business community was surprised and taken aback by the aggressive, "when not offensive language" from local authorities and some elected Congress members from the region towards investors and entrepreneurs interested in expanding their businesses, which "helps to create jobs and pay more taxes".