The Association of Metallurgical and Metalworking Industries (Asimet), in a work with Econsult, sent the Government an “Industrial Reactivation Plan” containing a battery of measures to deal in the short term with the impacts caused by the health crisis. The main objective of the strategy is to create 350 thousand jobs.
“According to the projections we took into account in making this strategy, the normalization of the economy would only begin in August, and inevitably this year’s contraction will be around 8%. Unemployment, meanwhile, will be around 25% by the end of 2020,” said Asimet President Dante Arrigoni.
“In terms of employment in the manufacturing industry, the effect of this crisis is enormous: as of May 2020 126,500 jobs have been lost, equivalent to a 14.4% drop in a year,” he said, adding that, in this scenario, “the revival of the industrial sector is key for Chile, and in particular that of manufacturing , which accounts for 11% of GDP, so we need to reactivate ourselves as soon as possible.”
As Arrigoni explained, the proposal submitted to the Government has an impact of US$6 billion in investment, and its main virtue is that it is a short-term strategy, with easy-to-implement proposals, that can be implemented immediately by the Government, “because they do not require long bills or further legislative or bureaucratic formalities, which usually always slow down such plans” Held.
Proposal
The Asymet Industrial Reactivation Plan Econsult is based on 5 concrete proposals:
1.- Redefine the categorisation limit for SMEs to strengthen the business base, thereby expanding the number of companies that can access support programmes and instruments. Specifically, it is proposed to double annual sales limits to UF 200,000, which would lead to an increase in workers’ coverage from 44% to 55%, and an increase in the incidence of Chile’s sales by up to 20%.
2.- Promote public and private infrastructure on three fronts: Infrastructure Fund, Directorate-General for MOP Concessions and GPS. At this point, it is proposed to activate the Infrastructure Fund’s Five-Year Business Plan to boost investment; accelerate and optimize the pipeline of government concession projects, prioritizing projects that reduce logistical bottlenecks, and speed up approval of private projects that could have the greatest impact on employment and national industry, and that are more advanced in the approval process, using the cadastre of GP projects
3.-Technological renewal that allows to adopt the practices of Industry 4.0. With the aim of promoting the renewal of machinery and technology associated with Industry 4.0. a 150% depreciation on the modernization of manufacturing machinery and associated technological products is proposed to encourage rapid adoption of innovative and productive activities in manufacturing companies.
4.- Incentives for the re-hirtion of workers until the end of 2021 to meet 25% unemployment. Aimed at those who have been unemployed for 2 months or more. 20% of the value of the remuneration of the new dependent worker shall be given as a tax credit to the company. The contract must be at least 3 months old, and the credit will have a cap of once the minimum wage.
5.- Establish an industry-focused governance authority. In particular, the restructuring of the current Ministry of economy is proposed. The Undersecretariat for Fisheries and Aquaculture is transferred to the Ministry of Agriculture, and a Undersecretariat for Industry is created.
“This plan is already in the hands of the country’s economic authorities, of whom we expect a positive will for them to integrate it into their short-term strategies to overcome this serious crisis,” concluded President de asimet.
