BY KEVIN G. HALL
Herald World Staff
SANTIAGO, Chile -- The Chilean economy will grow by 6 percent
this year, but
the country must reform its labor laws to distribute the wealth more equitably,
Chile's new president, Ricardo Lagos, said Monday in his first news conference.
Lagos, who began a six-year term Saturday, said he will have a
labor law reform
package ready to send to Congress by next week. Neither he nor his aides
provided details on how he would pay for reforms such as creating an
unemployment insurance fund.
``We are certain that the state will have to participate, and
so will the private
sector,'' Lagos said.
Labor reform is a significant issue in Chile. While most of South
America is trying
to reform the cumbersome labor laws of bygone eras, Lagos wants to create them
in a country where military rule quashed labor unions. Gen. Augusto Pinochet
yielded power to civilians in 1990, but many labor practices still date to his
Unlike in much of the world, the Chilean government makes no contribution
unemployment pay for workers, and unions' ability to organize and seek collective
bargaining was sharply curtailed. For much of the 20th Century, unions had been
an important political force in Chile, which had Latin America's longest record for
democratic transfer of power until a coup led by Pinochet deposed President
Salvador Allende in 1973. Lagos is the first Socialist elected president since
Lagos faces an uphill battle in trying to create new protections
for workers, who
now get a month's pay for every year of employment from employers when
terminated. The response is likely to be chilly from business-friendly conservative
parties in Congress.
Past attempts at compromise on labor laws got hung up on provisions
those that allow companies to replace striking workers.
``It will be a test case,'' said Manuel Riesco, a Santiago economist,
Lagos' efforts may set the tone for relations between the new president and the
In line with most predictions by economists, Lagos expects economic
at least 6 percent in real terms this year, and he pledged to keep Chile's budget
balanced. ``We think the government of President Lagos has a readied playing
field for a good economic year,'' Eduardo Aninat, deputy managing director of the
International Monetary Fund, said of Chile's growth prospects.
Lagos repeated that he wants to use revenue from new growth for
spending on education and health care. In an address to the nation Sunday night,
he pledged to create a program for a minimum level of universal health care, but
did not say how it would be funded.
In a nod to his onetime boss, Lagos told reporters Monday that,
like Allende, he
would give citizens access to the presidential palace during business hours.
Copyright 2000 Miami Herald