Presidential Message 2006

Presidential Message to the Nation
May 21, 2006

Mr. President of the Senate and former President of Chile,

Mr. President of the Supreme Court,

Mr. President of the Chamber of Deputies,

Senators,

Deputies,

Ambassadors,

My fellow Chileans:

A bit more than four months ago, the citizens of Chile gave me a major task.

On the night of January 16, I looked out the window to see thousands and thousands of people walking happily down the Alameda; women, young people and children wearing presidential sashes, with our colors, on their chests. So much applause; thousands of Chileans proud of their country.

Members of the Senate and the Chamber of Deputies, this is a sign of the new times dawning in Chile.

The country has experienced great changes in recent years. We have restored the climate of freedoms that characterized our Republic for so many years. We have built a more open, diverse and tolerant society.

And also, in the months since that January 16, we have noted a very good attitude. A spirit of renewal and new ideas is in the air.

This is a time for men and women, unlike any other in our country. We are reaping what we sewed a very long time ago. Along with so many notable men, women like Elena Caffarena or Amanda Labarca are here with us. The symbolism of Inés Enríquez, the dignity of Tencha Allende, the courage of Sola Sierra are here as well. But also, we can see above all the hard work and sacrifice of thousands and thousands of women throughout the country who toiled to bring up their families, work and study.

Who would have thought it! Today, a woman President is speaking before this Congress. My ten women Ministers and my 15 female Undersecretaries stand here as well.

As I promised during the campaign, here before you is the first gender-balanced administration in our history.

This is also a time for the people; for a more integral and integrated Chile that can belong to everyone.

This society will be more inclusive; it will not discriminate, and those who are left behind will not be forgotten. I am here as a woman, representing the defeat of the exclusion that affected us for so long. Now is the time to include those citizens who suffer from other kinds of exclusion into our society. We will dedicate ourselves to that.

This is a government of the people, and for the people.

The coming years will be decisive. This will be about consolidating a society that not only acknowledges freedoms, but also defends and promotes them. The State must not only outline rights; it must guarantee them to all its citizens.

I want to have critical, conscientious citizens who express ideas and demands. However, those criticisms should be made with a constructive spirit, with counter-proposals, and—most importantly—unmasked and non-violently. I want to be very clear: what we have seen in recent weeks is unacceptable. I will not tolerate vandalism, destruction, or personal intimidation! I will exercise the law to its fullest extent. We won democracy by showing our faces, and we need to continue without masks.

I am also proposing to renew the way the government exercises power. To receive advice on certain key reforms, I have named advisory councils with professionals of the highest level and important representatives of many different ways of thinking. The work of councils like these is very important. It is an innovative way of conducting public policies. Social dialogue is a commonly-used method in the most developed democracies.

How much easier it would have been—and probably quicker as well—to have a group of partisan technicians write up a bill in a few days! But no; we wanted to do this differently, including various points of view and greater citizen participation. That way, we can clear up misconceptions and agree on our diagnostics.

None of what we do will fully make unless we ask the people about it right where they live—in their cities, regions, streets and alleys. Workers, students and housewives can all participate. People can find out more at their schools, bus stops, courts, medical clinics and at home.

A country free of exclusions requires women to fully participate as citizens, in every way. Discrimination and segregation still happen in Chile, on a daily basis. My administration will support women’s rights as fully as possible.

[Applause in response.]

Thank you to the men who applauded as well!

We are also proposing to eliminate discrimination against women at the workplace, equal pay for both men and women doing the same jobs, an end to segregation based on what kind of pension or health insurance people hold, and we will work tirelessly to end domestic violence.

Meanwhile, we will refine the sexual harassment law, we will make child support suits more efficient, and we will guarantee the right of pregnant women and mothers to continue their studies. We will eradicate price discrimination against women of fertility age in private health insurance carriers (ISAPRES).

There are two, equally certain factors at play here. Women have the ability to do well. But they also need better opportunities, in order to integrate themselves into the modern world. We are practicing what we preach. The gender-balanced cabinet is just the beginning, not the end, of the road.

Chile will be a more developed, just and democratic country when powerful barriers to women in the workplace, culture, economy and public sphere come down. Without the active presence of women, we will not be able to defeat poverty or become a more competitive place.

The Chilean people have given me a job which I am honored to have. I introduced myself to this country with an agenda for my administration, which I am working to complete.

If we really want to do ourselves proud, we will need to begin by honoring our commitments. This is an administration that might not talk much, but it does do a lot, and it confronts problems.

We were transparent during the campaign. We told the country what we would do at the beginning of the term, with the 36 Measures, 100 Days program.

I have said that I will say what I think and do what I say. That is my political style. This is about following through on our words and setting priorities. Some of the measures I proposed to the country in this plan are priorities of this administration, while others are the beginnings of major reforms in key areas. The Chilean people want to know what their government will do, as well as how and when it will do it.

THE FOUR TRANSFORMATIONS

That is why this road map needs to be clear and available to all. Today, I am presenting to the country the four major transformations that my administration will carry out. These are big changes in four areas that are crucial to our efforts to overcome exclusions and build an increasingly more welcoming and inclusive society.

We have a historic mandate to do it. We have committed to achieving a more modern, integrated and developed country by 2010.

The first transformation has to do with the pension system. People cannot have a tranquil retirement without decent, secure pensions.

The second transformation will occur in education: we need more daycare centers and pre-schools for small children, and better-quality elementary schools and high schools for older children.

The third transformation has to do with innovation and entrepreneurship, with a new policy of development for growth.

The fourth transformation will be for us to create more friendly neighborhoods, with a better quality of life for those who live in them.

1. Pension Reform

Concern over the retirements of Chilean men and women is now an ethical and historical imperative for our society, particularly for our generation.

We already expressed our concerns about this in the plan for the first 100 days of my term. We passed two important measures: an extraordinary re-adjustment of the lowest pensions and a guarantee of supplementary pensions to all qualifying senior over 65. These measures will benefit more than 1.2 million people.

Today, I want to thank this Congress for quickly passing this law, which allowed us to start paying re-adjusted pensions starting May 1.

But that is not enough. The focus of our efforts will be the pension reform that we have begun.

Our mission is clear: we want a pension system that covers all workers; a system able to serve salaried workers and seasonal workers, professionals and microbusiness owners equally; a system that takes the different realities of our country into account. Everyone has the right to social security.

A preliminary report by the Pension Reform Advisory Council has identified the main problems. It has shown that even those who are most in favor of the current system acknowledge that it could be improved. Meanwhile, not even those who are most critical of the system are proposing to end the individual capitalization scheme.

There is widespread agreement around which areas to reform: seeking mechanisms to extend coverage to all kinds of workers, incorporating the self-employed, refining the system’s minimum guarantees, introducing more gender equality, encouraging more competition and transparency and increasing the profitability of the funds.

This will be a great reform, and I will send Congress a bill on this reform in the second half of the year.

2. Quality in Education

An inclusive society is a society that educates. We have done quite a bit. We are on the verge of offering free elementary and high school to 100% of the students who need it. As a society, we have guaranteed the right of our children to go to school for 12 years. We have also improved classroom spaces and supplied all necessary learning materials.

We have, then a solid foundation upon which to build. We have rights, and we know what we need to do to move forward.

Today, I invite you to participate in the following efforts.

We are going to deeply reform pre-school education, because that is where the first exclusions and inequalities begin to show up.

You already know that we are opening new daycare centers throughout the country as part of the 36 measures planned for the first 100 days of my administration. To date, we have opened 113, and we will reach our goal of 200. By the end of the year, we will have surpassed our goal of opening 800.

In the next four years, we will create a system to offer pre-school to all children between the ages of one and three who come from the poorest 40% of Chilean homes.

Our goal is to universalize kindergarten and pre-k. We already opened up 20,000 new spaces in pre-k programs during the first days of my term. Never again will a child entering first grade be attending school for the first time.

Of course I am not forgetting general education—elementary and high schools. What are we most concerned about? Quality, quality and more quality for all our children.

Without teachers that are truly trained to teach students from a variety of different backgrounds, we cannot make progress on offering quality education. That is why we are working with universities to establish common guidelines for teacher training, and we are demanding that teacher training centers receive accreditation.

Another fundamental point is that generating options for quality education depends on increasing resources for children who have less.

I will say this as clearly as possible: I am in favor of more resources for children coming from low-income families, but I will demand better academic performance standards from the schools those children are attending. That is why I am asking Congress to approve the preferential subsidy law soon.

We are going to work harder with district Mayors on public education, so that Municipalities can run their schools effectively and efficiently. We will offer priority support to 100 elementary schools and 50 high schools in densely-populated areas throughout the country. These schools will receive support from experts at universities and prestigious institutes, so that we can offer excellence in elementary and high schools all over Chile. We will thus be able to offer the same quality education enjoyed by children from the best private schools to children from Chile’s poorest areas.

There is something else on our list as well. In 1990, half of Chilean adults had not completed their high school educations. President Lagos thus began the Chile Califica [“Chile Makes the Grade”] program. During my term, more than 800,000 Chileans will be able to complete their elementary and high school educations, and will also receive job training in the process.

We have a good foundation upon which to build in post-secondary education. In Chile today, 70% of post-secondary students are the first person in their families to attend college.

In the 70 days of my term so far, more than 170,000 students have benefited. But we need to go even further. Now is the time to implement a National Student Aid System offering integral benefits programs: scholarships, of course, but also funds for food and transportation, as well as other types of aid. We will offer integral support to students so that they can finish their post-secondary school studies.

I do not want a Chile where we are all compartmentalized, without any social mobility. I want a country that rewards effort and merit.

Our future as a country is at stake in this great transformation, my friends.

3. Innovation for Development

Today, Chile is a middle-income country. If we continue to do things right, we will soon reach the income level of developed countries. In order to do that, we need to continue growing at a sustained pace.

Productivity is key for modern economic growth. Increasing productivity sometimes means adopting a new productive process, however basic. Sometimes it means organizing ourselves a bit better to lose less time, or using machines and equipment more efficiently. State regulation in this process should be a help, not an obstacle, so I have committed to reduce unnecessary bureaucracy.

Increasing productivity also means innovation; introducing new products and adding technological value to our exports. I want this to be a country that not only exports copper, but also mining software; not only fruit, but also techniques to pack and preserve foods; not only salmon, but also vaccines to prevent diseases in fish.

How can we achieve this? Many ideological battles have been fought over this, and they have not always been productive. In the 50s and 60s, some people argued that centralized planning was the only way to achieve greater productivity and growth. Later, other people said that the market was enough of a force to allow the private sector to take advantage of every opportunity for innovation. Today, both of these extremist positions have been discredited.

No one doubts that people carry out most productive innovation, in response to market incentives. But just as the market has achieved great things, it also has its flaws. Sometimes private incentives are not enough to bring about adequate social investment, and sometimes this spending does not occur because of a lack of coordination among private actors.

That is why there is widespread consensus today that countries need innovation and development policies: an active policy of public-private collaboration, offering focused stimuli to get businesses, universities, research centers and state agencies to all participate. Tax benefits are not enough, despite what some people say.

This means that we will have to build what the Organization for Economic Cooperation and Development—a group of wealthy countries—calls a National Innovation System. Today in Chile, we spend very little to encourage innovation: barely 0.6% of GDP. Two-thirds of this spending comes from the public budget, even though in countries that have been successful, the vast majority of funding comes from the private sector.

Without a doubt, Chile has work to do here. Today, I repeat my administration’s commitment to implement a new development policy oriented towards research and innovation.

In August 2005, a legal initiative to create an Innovation Fund was sent to Congress. This bill proposes to put together an Innovation for Competitiveness Council, which would be responsible for suggesting long-term strategies to the President and propose ways to use the funds every year.

The money collected from the Specific Mining Tax will go to support these innovation efforts. However, we will not tie public spending to the ups and downs on the international economy. The annual contribution will be determined based on long-term copper price averages, with extra income—if any—going to a special account to finance sustained initiatives in innovation.

The public sector will increase its spending on research and development by 50%. Our goal is for our country to spend more than 1% of GDP on research and development by its Bicentennial in 2010, with an important part of that money coming from the private sector, as in developed countries.

We will modernize institutions to prepare them for this challenge. Today, Chile has more than 30 programs or public development agencies, and many of them are well-evaluated. But they are not well-coordinated, somewhat redundant, and not very present in areas of the country outside of Santiago.

To follow through on the plan for the first 100 Days, we have already created a legal framework to create Regional Productive Development Agencies. These agencies will set priorities and coordinate the efforts of all public productive development programs throughout Chile. And we also want to create provincial development offices.

We will also improve and extend the mechanisms of CORFO [the State development company] to support individual innovation projects, so that they can be more accessible to more businesses, particularly smaller ones.

Today, there are 627,000 formal small and micro businesses, which employ 70% of the workforce in Chile. But this sector only produces 17% of sales and less than 2% of exports. These levels are much lower here than they are in developed countries. That is why I will once again reiterate my administration’s commitment to support growth and modernization in small and medium-sized businesses.

Last Friday, a decree was signed to create one single digital interface in which small businesses can take care of different bureaucratic procedures. We want entrepreneurs dedicated to improving their products rather than accumulating paperwork and filling out forms!

As for financing, BancoEstado [the State bank] will maintain sustained growth. By 2008, 300,000 of its clients will be small businesspeople. We will refine the Stamp Tax to allow for more competition and lower costs.

In June, I will send Congress a bill to establish a more simplified tax scheme for micro and small businesses, as laid out in Measure 22 of my 100-Day Plan. This new system will allow them to do their taxes more quickly, while also increasing their liquidity and creating incentives for them to make further investments.

Business people that take advantage of this system will be able to make their tax declarations and pay their taxes online, the same way individuals can. That way, small business can save time and money.

We will increase our efforts to make Chile a platform for the export of services, particularly within Latin America. Our achievements in exporting goods need to be complemented by the export of services as well, whether they are related to engineering and construction, finance and information technology, or transportation and telecommunications.

Access to information technologies—the invisible infrastructure of this new era—will be a priority. Just as electricity and potable water were the basic services of the 20th century, my administration will concern itself with guaranteeing society universal access to information. By 2010, 10,000 schools will be online through the Enlaces [Links] System. We will also offer digital literacy training to a million citizens.

To sum up: over the next four years, we will transform Chile’s productive development policies, creating a new national system for innovation. The private sector, universities and other non-governmental organizations will be partners in this State system.

This transformation into a more innovative, productive country is crucial. This is the only way we can achieve the standards of living enjoyed by developed countries.

4. Housing and Urban Development

We want friendly cities that the people can see as their own, respecting their heritage. Our urban policies will be oriented towards quality of life and land equity.

The first has to do with the construction of housing. We have built more than 1.5 housing units in the past 16 years. Now, we will implement a strategy to focus on quality housing, while stopping segregation by social class.

How will we do that? We will eliminate campsites and we will help migrants. We will focus all our efforts on drastically reducing homelessness among the poorest 20% of the population. This will be one of the major goals of my administration.

We will improve quality standards. We do not want houses that leak in the winter, or houses that present structural damage within a couple of years! We are going to strengthen legislation and oversight to guarantee quality construction.

We will speed up housing repair programs. And as for the houses that cannot be repaired: we will tear them down and build new ones! That is what the people deserve. We will also accelerate repairs to the buildings damaged in the earthquake in northern Chile.

We want better housing. We will increase the minimum amount of space in new public housing. We will support families that want to add onto their houses and apartments. We want to guarantee decent living conditions for all!

The most important thing is that we will improve the environment in which Chileans live. In the past 16 years, we have been mostly focused on building houses to alleviate the shortage we had. Now we will focus on building neighborhoods. We want safe, illuminated neighborhoods, with green areas and outdoor spaces for sports. We want more plazas and parks. We will repair streets and sidewalks. We will eliminate unlicensed dumpsites and we will offer incentives for clean-up programs. We Chileans have the right to live in more welcoming neighborhoods.

I will not forget about the middle classes, either. I have instructed the Minister of Housing to refine the process of offering housing subsidies to those who cannot qualify for a mortgage but live above the poverty line. We will also offer incentives for people to buy homes that are not necessarily just-built, as a way to diversify the housing options available to the middle class.

We will work to improve neighborhoods that have deteriorated over time. That is one of the 36 Measures. This is about working creatively to improve conditions in 200 neighborhoods throughout Chile, with the active participation of the people who live there.

This effort will go hand-in-hand with our policy of restoring historic neighborhoods. I have already said it here in Valparaíso just a few days ago. We have a responsibility to Chile and the world to take care of our heritage, our identity. So we will allocate urban renewal subsidies and funds for renovation to this.

We want beautiful, friendly, equitable cities. This will require a modern urbanism policy, with a sense of territory. This is about strengthening existing legislation and taking into account environmental and social factors in our urban planning efforts.

My fellow Chileans: when we celebrate 200 years as an independent nation in 2010, these four transformations will have established a foundation for the modern, inclusive society that we want to continue building.

In 2010, by the end of my term, the people will decide if we have met these four goals.

We have to work hard for this. I call on you to work hard.

Copper prices today offer an opportunity, but also a challenge. The history of Latin America reflects too many badly-administered price increases that ended in crisis. Our continent has an abundance of oil, tin, wheat and coffee, but none of these resources has guaranteed development for the nations that have them.

In Chile, rising nitrate prices financed a passing prosperity a century ago, but they did not bring about the sustained economic growth that the country had hoped for. When prices and exports collapsed, Chile entered into the deepest economic depression in its history.

The current situation, therefore, excites us, but it also will require cautiousness. We have seen how copper prices have risen only to fall later on—by close to 10% last week, for example. So let’s not fool ourselves: these high copper prices are surely temporary. We need to administer this income well, with prudence and wisdom, in order to make sure that our prosperity is not temporary as well. That is our challenge.

But what does it mean to act cautiously? It means spending part of the copper income, and saving another part.

Chile is fortunate to have clear regulations and institutions to guide fiscal policy, and we are going to rigorously apply these rules. I will repeat my administration’s commitment to continue the 1% structural surplus policy, just as I stated during the campaign and in my government platform.

I always said that we would finance our extensive social welfare program with the highest long-term copper prices, and that is what we will do. In the budgets of 2007 and the years to come of my term, we will spend the portions of our income that will be constant, rather than fleeting. This is not about offering people greater benefits, only to take them away later when copper prices fall. On the contrary, we will implement an ambitious social policy that will be sustainable at the same time. And with that higher income in the long-term, we will help finance the four transformations I proposed to the country today.

High copper prices also bring with them another challenge: making sure that the boom in mineral exports does not happen at the expense of other exports. The motor of our economic modernization has been our integration into further world markets, with new products. A development strategy in Chile needs to be a strategy for exports. I will also repeat today my commitment to the international competitiveness of our economy.

We have adopted, and we will continue to adopt, measures to preserve this competitiveness. When higher copper prices bring further income into Chile, and that income is spent domestically, the value of the Chilean peso rises against the dollar. This is just another reason to invest part of that income abroad.

That is why my administration has proposed to Congress the creation of two funds, in the Fiscal Responsibility Bill: one to guarantee pensions, and another one for Economic and Social Stabilization. We are going to invest all the money from this passing bonanza in those funds.

That way, we will be able to guarantee that our social spending can be sustained over time, while aiding the competitiveness of our exports. The most important thing is for these investments to be made with the security and transparency that the people deserve. For all those reasons, I call on the members of Congress to pass this bill as soon as possible.

This savings will bring us great benefits in the future, as well as profits in the present. Today, government investments are bringing savings precisely because we were so careful in the past. In 2006, we will spend that extra income on projects that will offer direct social benefits, always keeping within the framework of the structural surplus policy.

We will buy new equipment for regional hospitals with that money. Spending on hospital equipment will increase by 83% this year. We will open completely-equipped operating rooms, including new anesthetic equipment; that way, we will be able to reduce wait times for operations. We will buy 16 new mammography machines, in order to offer mammograms to all the women who need them and reduce cancer risks.

We will also buy 150 new ambulances, to be distributed throughout the country, as well as mobile dental clinics. That will allow us to reach more remote areas, offering dental care to more and more low-income Chileans.

We will buy 280 new police vehicles for districts with higher crime rates, because we want safer neighborhoods. We will also equip investigative units to offer better support for court districts created under the Criminal Procedural Reform.

To improve police prevention of contraband and drug trafficking, we will buy an aerial vehicle for the Carabineros Police, with infrared sensors and video cameras. We want secure borders, free of drug traffickers!

We will also support our agricultural industry, acquiring machinery and cutting-edge irrigation technology for small corn farmers in the 6th Region and rice farmers in the 7th.

[Applause.]

That’s from the Senators from those regions, of course. There is more to come, more to come.

We will develop a program to improve the cattle output of small farmers, particularly in the 9th and 10th Regions, integrating them into the export chain. These are just some examples; we are going to do more.

We will give more airplanes to the National Forest Service; we do not want to have to see how fires consume our forests again.

We will offer two benefits to exporters. We will increase the Small Business Guarantee Fund administered by BancoEstado, which will benefit all the country’s entrepreneurs. We will also develop an ambitious country-branding campaign, in conjunction with the private sector.

Education will not be left out of our additional efforts in 2006: we will increase the number of young people studying abroad with aid from the President of the Republic scholarship by 50%. We want more Chileans educated at the world’s best universities, so that they can then come back home and make a contribution to their society.

These are concrete programs for 2006. These are programs in which spending will take place abroad, but where Chileans will receive the benefits.

THE FOUR AREAS FOR PROGRESS

Today, I have proposed four great transformations to take place in the country between now and 2010. But the work of my administration will not end there. I have also identified four areas in which we will make progress. The first is social welfare.

1. A More Secure Chile

We intend to achieve a decent social welfare system that will accompany people throughout their cycle of life, protecting them in their first steps, ensuring them access to educational and work opportunities, covering them in case of illness or disability, and guaranteeing an adequate retirement.

The construction of this system—with employment, educational, healthcare, housing and pension components—is a priority objective for my administration. This will be possible thanks to progress made in this country over the years.

This will be a tremendous logistical challenge, requiring the reform of various public policies. We are going to begin by redoing the social classification of Chilean homes. The CAS survey is obsolete, so we are in the process of designing a new Social Protection Survey.

We cannot deny Chileans of benefits just because they have worked hard for years to acquire basic goods like televisions or refrigerators, or if they have their own home or a decent education. On the contrary, we should reward their efforts. With this new survey, we can focus certain key social policies—like supplementary pensions and housing subsidies—even further.

Job security is another aspect of this more secure Chile that we are going to build. We want more, better quality jobs; decent jobs, as I have said numerous times.

This week we have taken a step towards improving the working conditions of many Chilean women and men. We achieved an important agreement with all political parties over the Contract Workers Bill. We will have a law that avoids abuse without affecting jobs or small businesses.

But this is not just a legal issue. I want to appeal to the sense of social responsibility of all people that hire others, asking them to put themselves in the place of workers and realize that all human beings deserve to be treated with dignity. That is why I say that decent work is not only a legal imperative; it is also a moral one.

We also want more Chileans to have access to employment, especially young people and women.

A few days ago I sent Congress a bill to increase the benefits for the young persons’ hiring subsidy program, increasing salary subsidies from 40% to 50% of the minimum wage and extending the age of maximum eligibility for the program from 21 to 25 years of age. These changes were outlined in the 36 Measures plan. I have also resolved to increase the funding available for this subsidy. I hope that Congress passes this measure soon, because it will benefit many young people.

The Council for Pension Reform is currently studying another one of the measures we proposed for the first 100 days of my term, which will no doubt result in a bill. I am talking about the subsidy that we will contribute to the pension payments of low-income young people.

We do not want to promote just any kind of job program. We want young people with work contracts, who can learn and integrate themselves into society.

Women in the workplace face similar unequal situations. Just 37% hold jobs outside the home, and we all know how much women work within the home as well. In other countries in Latin America, this figure is approaching 50%, and it is 80% in Europe.

The World Economic Forum Competitiveness Report ranks Chile highly in various categories. However, in the three categories that evaluate the labor market for women, Chile is 96th out of 104 nations.

We need to do something now. We will promote part-time and telecommuting jobs. We will dramatically increase pre-school education and daycare, so that women can work in peace, knowing that their children are well taken care of.

Sometimes, however, people lose their jobs. But that is why there is Unemployment Insurance, a major benefit passed by the previous administration. We want to extend it. Today, more than 3.5 million Chileans are enrolled in such programs, in order to receive benefits in case they lose their jobs.

We will propose a reform that increases the benefits and coverage of unemployment insurance. We will design incentives for independent, self-employed workers, while extending eligibility for the Solidarity Unemployment Fund, so that workers who do not have indefinite work contracts and workers who have made fewer than 12 contributions to the fund can still have access to it.

The economy sometimes takes time to translate growth into more jobs. That is where the State comes in, to help those in need.

We have a whole series of support programs, from direct employment to micro-entrepreneurship programs. This will allow us to create 130,000 jobs this winter—a time when the unemployment rate traditionally rises. We will do this in the context of a new, more transparently-designed program, which I announced several weeks ago.

The country knows that we are making good on our promises. In the 100 Days Plan we said that we would go to the aid of cities that are especially depressed, for a variety of reasons. We have already announced 7,500 new jobs for Talcahuano and 8,600 for Valparaíso. And we will go to Coronel and San Antonio soon as well.

Let me say that I am also convinced that decent jobs can be promoted through unionization. We will encourage a program of social dialogue, gathering workers, impresarios and the government. We can all contribute to building up Chile. And without a doubt, modern labor relations are a fundamental part of that.

We will also struggle to fight poverty. The goal for 2010 is an ambitious one: zero extreme poverty.

This year, we will extend the Chile Solidarity program to 7,254 people living on the streets, as well as close to 15,000 seniors who live alone. We will also incorporate 50,000 new families into the Puente (“Bridge”) program. That will mean that by the end of 2006, 290,000 families will receive protection benefits from the State—close to a million people living in extreme poverty.

I also want to announce that these people will have a special Chile Solidarity ID card so that they can receive priority access to social services.

Seniors will also receive special care from my administration, of course with better pensions, but also with programs in other areas like healthcare, education, recreation and tourism for middle-class seniors, and attention and respect from all of us for poorer seniors. I do not want us to forget about our parents and grandparents.

But a more secure Chile is also a healthier Chile.

Primary care is the entryway into the healthcare system. I want more personal, better quality healthcare, with clinics achieving results. We will have more equipment, more medications, more specialists, and better care for mental and dental health issues.

We have moved towards that in recent days. We are building 65 Family Health Community Centers, to service smaller neighborhoods. By the end of the first 100 days of my term, 260,000 people will have access to centers like those. By the end of my administration, we will have 100 community healthcare centers throughout the country.

That does not mean that we will not continue with the rest, like medical clinics and hospitals. This year, we are slated to open 31 new medical clinics, and we will continue building more during my administration.

We will continue with the healthcare reform as well. On July 1, treatment for 15 more illnesses will be covered by the government, for a total of 40 illnesses now covered under the AUGE Plan. By the end of my administration, treatment for more than 80 illnesses will be covered.

FONASA [the public healthcare system] will continue with its important work. We have already assured that adults 60 and over will receive free medical care, but there are others that need special attention, like migrant workers and the self-employed.

We want better healthcare. A healthier Chile acknowledges people’s rights and duties. I am going to continue with the current bill and I will soon send instructions to begin debate in Congress.

We will continue building up a new policy for patients. I have instructed the Minister of Health to extend visiting hours at public hospitals to a minimum of six hours a day. We will also begin a program to allow parents to stay with their hospitalized children overnight.

As for those who are disabled, we will begin a program to train caretakers and offer support through primary care. At the same time, we have created a special subsidy for caretakers. This is one of the 36 Measures, and we are going to implement it.

We want quality, timely, efficient healthcare. We will use concessions to build hospitals in the Santiago districts of Maipú and La Florida. We will renovate the hospital on Easter Island. We will renovate and add on to the hospitals in Concepción, Temuco, Antofagasta, Alto Hospicio, Talca, Curanilaue and Castro. We will also renovate hospitals in Arica, Osorno, Copiapó, and Punta Arenas, among others.

We want to strengthen prevention efforts, while promoting healthy lifestyles. We will promote healthy eating. We will concern ourselves with obesity, encouraging athletics and recreational activities.

2. A More Prosperous Chile

How can we increase economic growth? I have already offered one part of the solution: productivity.

Another part is investment, and we are doing very well in that department. Stability, confidence and good policies, as well as low interest rates, are bearing fruits. This year we will break a record, reaching a level of investment being more than 30% of GDP.

Currently, more than 25 billion dollars are projected to be privately invested between now and 2010. My administration will do everything possible to make sure these and other investments become a reality.

We will also invest in infrastructure and physical integration. The amount invested in public works in recent years is unprecedented. Today, we are entering a new phase.

We have an obligation to be ensure quality construction, and we have an obligation to our national heritage. I will send a bill to create a Superintendence of Public Works, in order to make sure that all public works can adequately meet the needs of the people. At the same time, we will refine the concessions system to make sure it works in the public interest.

We will promote competitiveness in productive sectors, especially in those areas that sustain employment growth like mining, agriculture and tourism.

We are going to reinforce our network of airports in the country, built to the highest standards. We will quicken the pace of construction on the Interlagos Route to Cochamó. We will build roads on the Altiplano Route to San Pedro de Atacama, and the Austral Route in the 10th Region.

We will continue working on physical integration projects spreading towards Argentina and Bolivia like the Trans-Andean Train and the Pehuenche and Aguas Negras border crossings, among others. In the north, we will consolidate the Arica-Tambo Quemado and the Iquique-Huara-Colchane Routes.

We will also begin a Road Concessions Program to improve regional roads, because as we build a more competitive country, we need infrastructure to improve people’s quality of life.

We will open the Copiapó-Vallenar-Caldera double-lane road. We will improve road connections throughout Patagonia from Puerto Montt to Puerto Natales, and passing through Chiloé, Palena and Puerto Yungay. We will also increase connectivity among more than 54 isolated areas.

Our focus on isolated areas will also be placed upon areas like Arauco, where we will build a two-lane road from the Port of Bío Bío to Coronel, and then from there to Tres Pinos.

I also want to announce that I will send Congress a bill related to storm drains, in order to be able to allocate private capital towards such projects. That way, we can fix the problem of flooding once and for all.

By 2010, we will complete port infrastructure for artisanal fishermen in most fishing villages, helping more than 19,000 fishermen.

We will continue to prioritize the construction of by-pass routes to get trucks out of cities. We will do this in San Pedro de la Paz and Penco, among other cities.

I am sure that all of these advances will result in more competitiveness, integrating areas that were once excluded, and improving people’s quality of life.

During the presidential campaign, I made a commitment to people from rural areas: if we work well, we have the conditions in place to make Chile a world-class food production center.

Today, the agricultural industry generates approximately 25% of Chile’s GDP, and employs close to 20% of our workforce. We can grow even more. As the State, we will channel all our efforts, institutions and development programs into this. Of course this includes creating a Ministry of Agriculture and Foods by the end of my administration.

I have already talked about the extraordinary support that we can offer the agricultural industry with the money that we have saved. We will strengthen the Agriculture and Cattle Service and support hydraulic projects that are indispensable for agricultural development.

We will irrigate over 204,000 more hectares of national land for agricultural production. We will finish the Laja Diguillín, Faja Maisan and Corrales projects in the Choapa Valley. We will begin a project to build the El Bato Reservoir in Illapel and the Convento Viejo Reservoir in Chimbarongo. Add to that the Ancoa Reservoir in Linares and—through the concessions system—the Punilla Reservoir in Ñuble and the Puntilla del Viento Reservoir in Aconcagua.

We want agrarian development to be an inclusive process. If the success of these large numbers does not benefit the people, is only superficial. So we will work to strengthen small family farming, and we will take care of people’s farm debts, by offering them loans and aid in their efforts to export their products.

Above all, we will concern ourselves with working conditions, worker safety and hygiene, and field workers.

Without a doubt, one of our major challenges is to have enough power and energy to fuel the growing economy. We have proposed an ambitious but realistic plan to the country that will guarantee autonomy, independence, diversification and efficiency.

Energy security comes at a cost; however, the lack of energy would cost even more.

That is why we are taking action in areas like the LNG project in Quinteros, gas explorations in Tierra del Fuego, public-private energy efficiency cooperation programs, agro-energy development programs and dialogues with other countries to bring about continental energy integration.

Chile needs to use all the resources it can to generate electricity, including using renewable resources like hydroelectric, wind and geothermal energy projects, among others. Water, wind and vapor are part of our wealth. The country cannot afford not to use those resources, especially in the context of a world marked by restrictions and high prices.

I know that people in the middle class are concerned about unstable gas prices. I share that concern, and that is why I am going to take action on the matter.

On one hand, we will renew the Gas Prices Stabilization Fund. Soon, we will also send a bill to create a new fund, which will be similar to the previous one in terms of its objective and operations, but with a few technical improvements.

I want to send a clear signal. Gas prices are higher this year than last throughout the world. Chile is no exception to that. The fund can only mitigate price fluctuations; it cannot change the course of pricing trends.

That is why I have decided to protect those who are most affected by these price increases. I will offer a subsidy to all the families enrolled in the Chile Solidarity program, all the families receiving the Unique Family Subsidy, and all families who receive income supplements because their income is lower than 180,000 pesos a month. All of them—more than 1.225 million families—will receive a special, 18,000 peso subsidy this winter.

While energy is one challenge to our economic growth, another is our environmental development strategy. Our challenge is to find a good equilibrium between growth, development and environmental protection. We will implement a new, more modern and stricter environmental policy based on sustainable development and social participation.

No investment will make a profit at the expense of the environment. We will not evaluate isolated projects, either; we will take land use into account as a focal point of our new policies.

I have already sent Congress a bill to create a president of the CONAMA [National Environmental Commission] Council of Ministers—who would hold Minister rank—because we want to give this issue the treatment it deserves.

If Congress passes this, we will soon be able to swear in a Minister of the Environment, for the first time in Chilean history. That person’s goal will be to re-structure environmental institutions, including the creation of a Ministry of the Environment and a Superintendence of the Environment. We want to bring about a more proactive process of oversight.

3. Better Quality of Life in Chile

I said it from the very beginning: the people will be the focus of the actions we take.

Security begins with the basics: the safety of ourselves and our families. I do not want neighborhoods living in fear. I want families able to enjoy the comings and goings of their neighborhoods and streets. I want young people to enjoy their youth.

We have taken initiative in many areas related to safety. We have refined our criminal procedural system. We are building jails. We have incorporated more districts into the Plan Cuadrante [Quadrant Plan]: by the end of the year, almost two-thirds of the population will be living in districts enrolled in this plan. We are increasing and modernizing our police force. That is why I want to thank Congress for quickly passing the bill to increase the number of Carabineros Police by 1,500 officers every year.

We know that prevention is crucial if we are to fight crime. We will begin or extend youth job and training programs, as well as drug prevention efforts. We will redouble our effort to fight truancy, we will design public spaces, and spend more on athletic facilities.

But we want to take another important step. In June, I will send Congress a bill to create a Ministry in charge of citizen safety, where we can concentrate our efforts to fight and prevent crime more efficiently.

Quality of life also has to do with the modernization of our public transportation systems.

We have committed to fully implementing the TranSantiago plan. The country has seen how we have decisively confronted this matter, assuring that it will work by February of 2007. Once this ambitious plan is fully implemented, it will allow for better transportation quality and service, with less congestion and—most importantly—less pollution.

We will also complete the planned expansion of the Metro network, increasing Line 2 northward and building the section of Line 4 that runs along Américo Vesputio and links up with Line 2 in the south of Santiago. We will also extend the Metro towards Maipú, which will benefit the residents of districts like Quinta Normal, Estación Central, Pudahuel and Lo Prado. It will also include a connection with Cerro Navia. We are talking about easing the transport of 200,000 more people, every day.

With these massive projects, the Metro will have 105 km, run through 21 districts of Greater Santiago, and will carry more than 785 million passengers per year by 2010.

But not everything will take place in Santiago—we will also offer benefits for other regions of Chile. We will continue developing our plans for transportation in Valparaíso and Concepción. We will continue implementing transportation plans that have already been tendered in Iquique, Antofagasta and Rancagua. We will also continue offering subsidies for regional transportation, in order to offer benefits to faraway areas of the country.

Our work would not be complete if we did not concern ourselves with those Chileans who find themselves excluded from music, the arts, literature and poetry. Culture is a right and we need to guarantee everyone access to it. Also, culture allows us to achieve a much more integral level of development as a country.

I will once again affirm my commitment to open at least one library in every district of Chile. This is about putting books at the center of cultural communication, as a bulwark of ideas and creativity.

We will also open a cultural center in every urban center with more than 50,000 residents. We will do it in conjunction with the Municipalities, supporting local artistic and cultural initiatives.

We will ratify the UNESCO Convention on the Protection and Promotion of Cultural Diversity. This is an opportunity to reaffirm the value of cultural expressions as part of our heritage.

That will be our guiding spirit: an inclusive Chile is a country that also offers democratic access to culture.

4. A More Integrated Chile

The transformations that we are proposing are backed by our increasingly more cohesive democracy, in which all people are given a space to participate and debate, and all rights and freedoms are respected.

We want quality democratic institutions. That is our challenge today, after the 2005 constitutional reforms. Soon I will send Congress a bill to reform the current electoral system, just as I promised during the campaign.

Different opinions will certainly come up. I know that this is a very controversial issue. However, I hope that all of us can agree that a more representative, competitive electoral system that guarantees governance is essential to the quality of our democracy.

We need to change the law, but what needs to change is more than the law. Our democracy needs to really reflect the country, and in the case of women, it has fallen somewhat short.

There is something basic that does not square here, and I think that the honorable members of Congress here would agree.

Despite the fact that we often say that we need to privilege minority groups, and we talk about women, there is a paradox, because half of the people watching us from their homes right now are women. Half of the people that recently greeted us in the streets were women as well. Half of the people in the audience here are surely women. Half of the people who voted were as well. Half of the cabinet here are women, as is the President of the Republic.

And yet, one of the places where women are represented so well, albeit so scarcely, is here in Congress!

Let us say it forcefully: this is not for lack of ability! Women are no less interested in what is happening in Chile! Nor do we not know how to use our power!

This is happening because barriers that are centuries old exist in our institutions, customs and minds. The time has come to lift those barriers. I propose that the time has come to recognize that women are here in the public sphere to stay. It goes without saying, right?

There is another essential reform: the constitutional recognition of our indigenous people. We will insist on this, because we consider it an act of justice, of historical reparation. It is an ethical imperative for us to recognize who we are: a nation made up of many peoples.

We want to promote the development of our aboriginal peoples, both rural and urban, while recognizing and respecting their dignity, rights and roots.

I want our indigenous peoples to feel included in Chilean society and represented by the State.

The cohesive Chile that we want to build will also have to recognize that there are many inequalities and exclusions that we need to address: discrimination against the handicapped, immigrants, sexual minorities, the poor, the elderly. The country often disregards the talent of so many just because of its prejudices.

The State will set an example, and we will release a Code of Good Practices in the days to come that prohibits discrimination for any reason, introducing measures like asking that people’s photos be included along with their resumes.

I also ask Congress to approve the law against discrimination soon.

I will give you another example of exclusion: why can’t we agree once and for all to offer Chileans abroad the right to vote?

We want to live in an increasingly inclusive Chile, which makes sure to include all regions of the country in its effort to develop. The country cannot develop unless all its regions develop. Today, I want to re-affirm the commitment to decentralization that I made to the citizens of all regions and districts.

My commitment is for all citizens to be able to democratically elect their regional authorities. My commitment is to hand over many powers to regional governing bodies. My commitment is also to give all the regions more decision-making power over their local resources, through the Regional Development Agencies I mentioned earlier.

My commitment is for each region to make decisions about its own investment projects. My commitment is also to municipal management, giving more power and resources to those municipalities that have shown good management practices, for example. And of course, I will commit to strengthen social organizations, with specific support and training programs.

A cohesive Chile is built from its base, in the field, with the people doing their day-to-day tasks.

Until now, we had been asking how far we could go as a nation. Now we should talk about how close we can be to the people we serve, with equal force and determination.

My friends, the people should not be at the service of the State. The State ought to be at the service of the people.

In Chile, some people can be more prosperous than others, and some may have more problems than others. However, for the State and the government, no one has any more dignity than anyone else. Everyone deserves respect and they all have a right to demand that respect. I will not all any of my collaborators to forget that.

I also want Chile to be more transparent. We want everyone to know what the State does, how and when it does it, how much it is worth, and why we do it. More information is more democracy. I want a country where public ethics are a valued commodity, at all levels of governance.

I ask this Congress to pass the lobbying bill currently under debate, in order for lobbying to be an open, public activity. We will modernize the General Comptroller of the Republic, so that it can offer more effective preventive inspections. We will demand greater transparency in all political parties, in the central government, in the municipalities, in business and in all other areas.

Another important issue is that we will reform the notary and real estate registry systems. It is unacceptable for bureaucratic procedures to last for several days or weeks, or cost so much. The State has done a lot of work in this area, and has pioneered electronic interfaces in the Internal Revenue Service and the Civil Registry, among other institutions. Now it is time for notaries and real estate registries to do the same.

A robust democracy must include an impartial justice system that serves all citizens, without distinction. That is why we will reinforce the actions of the justice system.

We have made enormous progress. The Criminal Procedural Reform is now in effect throughout Chile, and we will make sure that it is adequately implemented. Now we will move forward on other priority issues.

This year, we will begin the reform of the civil justice system: the Civil Procedural Reform. We need to end lawsuits that drag on for years and years without a firm sentence. We need to reward agility, rather than delay, in the judicial process.

We are going to increase institutional capacity to resolve disputes among neighbors. This is about bringing the justice system closer to the people. We will also strengthen the apparatus that defends consumers’ and citizens’ rights.

I also want to re-affirm my commitment to implementing the new Juvenile Criminal Accountability Law in the coming year. We will make sure to give young offenders decent incarceration infrastructure, opportunities for education and drug rehab programs.

We will also redouble our efforts to improve and quicken the new Family Court and Labor Tribunal systems, in conjunction with the judiciary.

There is another issue that I cannot avoid mentioning: a healthy democracy is built upon truth and justice. I look back and I see how much progress we have made in terms of human rights causes. No one in Chile justifies what is unjustifiable. Courts need to continue their work hearing cases of human rights violations.

I have come to terms with a painful inheritance. It is necessary to respond truthfully, fairly and with reparations to the human rights violations that occurred in our recent past, in order to lay the foundation for cooperation among all Chileans.

That is how the Concertación administrations have understood it. That is how I have understood it. We have taken care to offer concrete reparation measures, to acknowledge the truth about those Chileans who were arrested, disappeared and executed, as well as about those who were imprisoned and tortured. Let me be clear, my fellow Chileans: we will never cease to search for detained and disappeared people.

We have experienced great pain. It seems impossible to solve many cases beyond the shadow of a doubt. However, although I know that identification of some bodies will be extremely difficult, as President I want to say that we will continue to hope that we can find out the truth about many people, now or in the future. That is my commitment!

The process of identifying the bodies of people who were illegally buried has experienced many delays and difficulties. The reports made public several weeks ago indicate that there were many errors in the identification of the bodies of people who were arrested and executed; this is painful for us all, and acts as a deep wound for our conscience.

We are going to make as much of an effort as possible. We want to be able to tell all the family members of people who died, and everyone who suffered from human rights violations that they are welcomed by a society that empathizes with their suffering. That society has also made a commitment: things like this will never happen again.

In order to do that, we have employed all the resources at our disposal, and we will continue to do so. We will evaluate the processes of identifying the bodies in conjunction with the legal system, and we will define cases that need to be re-opened and re-evaluated by Chilean and foreign experts.

We will be clear and transparent. We will say what we can and cannot do.

We hope that a bill can be passed this year to create a National Human Rights Institute, an autonomous organization to preserve and protect human rights causes and recommend measures to guarantee human rights.

My commitment to human rights, to the people, and to the law, is also expressed in our international policy.

The world respects us for who we are: a country with responsible, democratic institutions, searching for its road to development. But we are also respected for what we promote: the values of democracy, peace and multilateralism; respect for international law; free but fair trade; and integration—although it can sometimes be complex, it is necessary for the development of our people.

Although it will take into account global tasks and deepening our international economic ties, my administration will prioritize regional politics, particularly now, with a debate going on about the future of regional integration. Chile has not been, nor will it be, a passive actor in this debate; we have an important role to play in this phase of discussions.

We will continue to promote political collaboration and trade within the region, particularly emphasizing physical and energetic integration and connectivity initiatives to improve the quality of life of the people of Latin America.

We will step up our support of regional cooperation. We want to offer Chilean professionals and technicians more incentives to offer our neighboring countries more assistance. We want to deepen ties. We are offering the best resource we can for this effort: our people.

One immediate, concrete goal is to continue contributing to the success of democracy in Haiti, upon which both the stability of the Caribbean and the credibility of the United Nations—and the region itself—depend.

Haiti is a challenge for Latin American countries. We need to show that we can resolve our own problems of development and security in a concerted manner, and that we can find common ground with the international community, Europe and the United States.

We have been successful. Haiti just held the most successful democratic elections in its history, and I want to sincerely thank Congress for approving a measure to keep Chilean troops there. As a Chilean I feel very proud of our efforts, because we are building peace there.

And we are building it with a military that represents all Chileans. This military is modern and professionalized, and works for peace. We will move towards voluntary military service, with more professional soldiers and more women. We will maintain a defense policy that will be coherent with the country’s strategy for development. This shows in our defense records, which are here and available to all Chileans, as well as the international community.

My fellow citizens:

Today, we are all working to make Chile a more prosperous place. We will not rest in these efforts. However, the prosperity we are seeking can exclude, or it can be shared. Chile can be a divided country, or a charitable country. I have no doubts as to how if should be.

My administration is committed to opening up more opportunities for all. This is a commitment to everyone—not just one sector or group.

Those of us here in this honor salon, the men, women and young people listening and watching us, are all on the same side. We all love our country and we want the best for Chile. That which unites us is much more than what divides us.

My friends:

I have talked about numbers and programs, transformations and goals. But there is something else in my work as a President. Governing, for me, is also about seeing, listening and responding to people.

I want to read a letter that a little boy sent me. Here it is:

“Hello Madame President:

I want to congratulate you because you are going to bring Chile forward. You can make Chile a better place for its people.

Poverty can be seen in people’s homes. It’s like a cold—we have to find a cure. You are the cure for those who are most in need.

Madame President, I know that you can stand up for a new, more trustworthy Chile.

Sincerely,

Rodrigo Valenzuela Mardones

6th Grade, Avenida Principal School, Conchalí, Santiago.”

In his innocence, little Rodrigo tells us something that we should never, ever forget: a government that commits to its people can make an enormous difference in the lives of its citizens.

I want to tell Rodrigo, and others like him, that we will create this “new and more trustworthy” Chile he mentions, with everyone’s help.

In 2010, at the end of my administration, Rodrigo is going to be in high school. He will be thinking about taking the university entrance exam and going to college. I will work hard so that Rodrigo—all Rodrigos, and all Marías too, for the women here listening—can receive scholarships as a reward for their hard work and studies. Their capacity to create cannot be limited. They need to be able to learn, surf the Internet, and integrate themselves into the world.

I will work to make sure his younger neighbors can go to daycare and pre-school, where they can receive and education and care. That way, their mothers can work outside the home if they choose, in good jobs, with schedules that allow them to have time to be with their families.

In 2010, the city where Rodrigo and his family live will be safer and more welcoming. Rodrigo and his brother will be able to take comfortable, clean public transportation to school. His grandfather will receive a decent pension, and his grandmother will be able to seek treatment in a nearby, well-equipped medical clinic.

That is the kind of Chile I want for Rodrigo and all Chileans: a new and trustworthy Chile, as he says.

That will be a modern, welcoming Chile that belongs to everyone; it will be more integrated and more convivial, more just, more humane.

That will be Chile in 2010, and we are going to head in that direction.

Thank you very much, and have a good day.